What is emv and eol approach, Cost Accounting

Assignment Help:

Adele Weiss manages the campus flower shop. Flowers must be ordered three days in advance from her supplier in Mexico. Advance sales are so small that Weiss has no way to estimate the demand for the red roses. She buys roses for $15 per dozen and sells them for $40 per dozen. Pay-off table for the problem is given below.

 

Demand for Red Roses

Alternative

Low (25 dozen)

Medium (60 dozen)

High (130 dozen)

Do nothing

0

0

0

Order 25 dozen

300,000

300,000

300,000

Order 60 dozen

100,000

600,000

600,000

Order 130 dozen

-100,000

400,000

900,000

Probability

0.3

0.4

0.3

What is the decision based on each of the following criteria? Show work in making the decision for each criterion.

a)      EMV approach

b)      EOL approach

Use the tables given below.

a)      EMV Approach

 

Demand for Red Roses

 

Alternative

Low (25 dozen)

Medium (60 dozen)

High (130 dozen)

EMV

Do nothing

 

 

 

 

Order 25 dozen

 

 

 

 

Order 60 dozen

 

 

 

 

Order 130 dozen

 

 

 

 

Probability

0.3

0.4

0.3

 

b)      EOL Approach

 

Demand for Red Roses

 

Alternative

Low (25 dozen)

Medium (60 dozen)

High (130 dozen)

EOL

Do nothing

 

 

 

 

Order 25 dozen

 

 

 

 

Order 60 dozen

 

 

 

 

Order 130 dozen

 

 

 

 

Probability

0.3

0.4

0.3

 


Related Discussions:- What is emv and eol approach

Journal entry for sale of machinery, Rayya Co. purchases and installs a mac...

Rayya Co. purchases and installs a machine on January 1, 2013, at a total cost of $105,000. Straight-line depreciation is taken each year for four years assuming a seven-year life

Calculate remuneration of employee of an organisation, Calculate Remunerati...

Calculate Remuneration of Employee of an Organisation Based on the data underneath that you are necessary to calculate the remuneration of all employee like determined with ea

Determine operating cash flow, What are the missing amounts for the below a...

What are the missing amounts for the below amortization table, given the following information? -  A firm borrows $100,000 from a bank. -  The terms of the loan require the f

ECONOMICS, #ques Case Study Electron Control, Inc., sells volt...

#ques Case Study Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for

Calculate the group profit and loss, Using the chosen company from Bursa Ma...

Using the chosen company from Bursa Malaysia, prepare a consolidated accounts assuming that the chosen company acquire Sure Cargo Behard at 80% of its ordinary shares. Given bel

Variance, What is a standard and acceptable variance

What is a standard and acceptable variance

EOQ , formula for economic order quantity

formula for economic order quantity

Evaluate the overhead allocation rate, Vintage Auto Company manufactures pa...

Vintage Auto Company manufactures parts to order for antique cars. Vintage Auto makes everything from fenders to engine blocks. Each customer order is treated as a job. Vintage Aut

Test accounting of monetary instruments, This question tested the accountin...

This question tested the accounting of monetary instruments, especially an asset held at reasonable value through loss or profit. The preparation of the journal for subsequent and

Calculate the gross profit margin, Assets                                  ...

Assets                                               2011                                                                        2010 Non Current Assets

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd