Aero Dynamics Corporation manufactures certain electronic products for the aviation industry. products industry. In 2018, the company's
Fantastic news! We've Found the answer you've been seeking!
Question:
Aero Dynamics Corporation manufactures certain electronic products for the aviation industry.
Transcribed Image Text:
products industry. In 2018, the company's management was reviewing the inventory policy for YM-10, on of the electronic chips used in the production process. The chip is procured in small cans for £100 each can. The firm uses 4,800 cans per year. An activity cost analysis revealed that placing an orde entails significant administrative costs. These costs include cost of raising purchase requisition of £1 per order; getting a quote from three suppliers costing £15, placing an order costing £5, inspecting and recording an incoming order against specifications on purchase order costing £20. The driver fo all these costs was believed to be number of orders. In addition, shipping cost for each order of YM 10 borne by Aero Dynamics was £100 per order. The current applicable interest rate on financing inventory is 3%. The only other relevant holding cost was believed to be insurance cost of 1% pe year. viatio products industry. In 2018, the company's management was reviewing the inventory policy for YM-10, on of the electronic chips used in the production process. The chip is procured in small cans for £100 each can. The firm uses 4,800 cans per year. An activity cost analysis revealed that placing an orde entails significant administrative costs. These costs include cost of raising purchase requisition of £1 per order; getting a quote from three suppliers costing £15, placing an order costing £5, inspecting and recording an incoming order against specifications on purchase order costing £20. The driver fo all these costs was believed to be number of orders. In addition, shipping cost for each order of YM 10 borne by Aero Dynamics was £100 per order. The current applicable interest rate on financing inventory is 3%. The only other relevant holding cost was believed to be insurance cost of 1% pe year. viatio
Expert Answer:
Answer rating: 100% (QA)
1 Computation of Ordering Cost Raisiing Purchase Requisition 10 GBP Add Cost of getting ... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date:
Students also viewed these general management questions
-
A lot of 100 semiconductor chips contains 20 that are defective. (a) Two are selected, at random, without replacement, from the lot. Determine the probability that the second chip selected is...
-
An order clerk fills out a purchase requisition for an expensive item of inventory and the receiving report when the merchandise arrives. The clerk takes the inventory home, then sends the invoice to...
-
Can process costing be used for a service organization? Explain. Explain how process costing can be used for JIT manufacturing firms.
-
The Niakwa Industries prepared the following statement of earnings and comparative statement of financial position for 2020: The Niakwa Industries prepared the following statement of earnings and...
-
Discuss some of the presentation differences between the operating statements of not-for-profit and business-type governmental health care entities.
-
The incremental rainfall data in the table were recorded at a rainfall gage on a small urban parking lot of 1 acre. Be careful to use a 0.5-hr time step and record intensity in cm/hr. (a) Plot the...
-
A cost management system is made up of three primary elements: (1) motivational elements, (2) informational elements, and (3) reporting elements. Classify each of the following items, a through...
-
Jack Davis opened a medical practice in Sacramento, California, and had the following transactions during the month of January. Jan. 1 The business received $35,000 cash and issued common stock to...
-
Exercise 13-3 (Algo) Make or Buy Decision [LO13-3] Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for...
-
Write a program that accepts a number of quarts from a user and converts the value to gallons. Include exception-handling capabilities in the program so that while any nonnumeric value is entered,...
-
A) Write (in order) the list of vertices that would be visited by running a breadth-first search (BFS) and a depth-first search (DFS) starting from A. B) Draw a Dijkstra's Shortest Path and find the...
-
Swifty Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $7.00 per pound $7.00 Direct labor-1.50 hours at $11.10 per...
-
Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data...
-
A company can manage their working capital in many different ways. One way would be to use trade credit facilities where the company canpurchase product or services and then pay the supplier at a...
-
A cost accountant wished to establish the average amount spent by executives per day on travel and lodging. Then a comparison, between the average and the amount turned in to be reimbursed, will be...
-
calculate the most current days of working capital (DWC) for Samsung and How does this company's ratio compare to those of its competitors?
-
The following estimated regression equation is based on 30 observations. = 18.1 +3.81 - 2.5x2 +7.5x3 + 2.9x4 The values of SST and SSR are 1,801 and 1,756, respectively. a. Compute R (to 3 decimals)....
-
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cashflows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit...
-
Audit documentation that shows the detailed evidence and procedures regarding the balance in the accumulated depreciation account for the year under audit will be found in the a. Current file audit...
-
When a CPA knows that a tax client has skimmed cash receipts and not reported the income in the federal income tax return but signs the return as a CPA who prepared the return, the CPA has violated...
-
To perform an attestation engagement on prospective information or pro forma information, accountants must do all of the following except a. Obtain knowledge about the entitys business and accounting...
-
How has the London Stock Exchange kept its position as one of the leading markets?
-
What is Mifid and what were its aims?
-
What are multilateral trading platforms?
Study smarter with the SolutionInn App