Question: A manufacturing firm has been offered a component part it uses according to the following discount pricing schedule provided by the supplier: QTY PRICE/UNIT 1

A manufacturing firm has been offered a component part it uses according to the following discount pricing schedule provided by the supplier:

QTY……………	PRICE/UNIT
1 – 199…………	$65
200 –599………	$59
600 +…………...	$56

The company uses 700 of the components annually. Annual carrying cost is $14 per unit, and ordering cost is $275.

a) Determine the amount the company should order.

b) If the supplier was willing to negotiate, and the company preferred to take delivery of its annual supply of the part in a single order, at what price per unit would that become economical?

Step by Step Solution

★★★★★

3.37 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The economic order quantity is determined as follows EOQ 166 units This quan... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-M-A-P-C(4533).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

A manufacturing firm has three inventory control accounts. Name each of the accounts, and describe briefly what the balance in each at the end of any accounting period represents.

The president of a small manufacturing firm has been concerned about the continual growth in manufacturing costs over the past several years. The following is a time series of the cost per unit (in...

A manufacturing firm has two suppliers for an electrical component used in its process: one in Mexico and one in China. The supplier in Mexico ships 82% of all the electrical components used by the...

2. what is the lowest total cost of inventory we can achieve with the discount schedule and inventory cost 3. what quantity should the company order each time 4. if the suppliers were willing to...

A manufacturing firm has been offered a component part it uses according to the following discount pricing schedule provided by the supplier: QTY PRICE/UNIT 1 - 199 $65 200 - 599 $59 600+ $56 The...

A manufacturing firm has been offered a component part it uses according to the following discount pricing schedule provided by the supplier: QTY_________________PRICE/UNIT 1 -...

Question 1 (10%): A manufacturing firm has been offered a particular component part it uses according to the following discount pricing schedule provided by the supplier Order quantity Price/unit 1 -...

A manufacturing firm has been offered a particular component part it uses according to the following discount pricing schedule provided by the supplier. Quantity Price 1 - 1 9 9 $ 6 5 2 0 0 - 4 9 9 $...

Q4) (15 points) A manufacturing firm has been offered a particular component part is uses according to the following discount pricing schedule provided by the supplier. 1 - 199 200 - 249 250 - 299...

Figure Q4(d) is a type of op-amp Multivibrator. If the output V, is at +Vsat explain in point form how the output will change if V, goes to +Vec then -Vece then back to +Vec again. Ri Figure Q4(d)

Given the situation in Theorem 4, write f(x) = r0p0 (x) + r1p1(x) + + rmpm (x) Suppose that f(x) has at most k roots for any choice of the coefficients r0,r1,..., rm, not all zero. (a) Show that...

If a firm is unable to make one or more debt payments in full and / or on time, it is said to be in a state of _ _ _ _ _ _ _ _ _ _ on those debts. In serious cases, defaults can lead to a legal...

3.5 Explain the pitfalls in the following statements. a. People who like playing golf are more likely to have a luxury car than people who do not play golf. Therefore, having a luxury car causes...

A ray of white light traveling through fused quartz is incident al a quartz-air interface at angle 1. Assume that the index of refraction of quartz is n = 1.456 at the red end of the visible range...

In Figure, unpolarized light is sent into the system of three polarizing sheets, where the polarizing directions of the first and third sheets are at angles 1 = 30? (counterclockwise) and 3 = 30?...

In a region of space where gravitational forces can be neglected, a sphere is accelerated by a uniform light beam of intensity 6.0mW/m2. The sphere is totally absorbing and has a radius of 2.0 m and...

Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The...

You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns of these two securities? State of Economy Probability of State of Economy Rate of...

Make the financial ratios analysis of MyDeco Corporation Financial Statements & Stock Price: MyDeco Corp. (66.7) (All data as of fiscal year end; in $ million) 2009 2010 2011 2012 2013 404.3 363.8...