Deli Pizza is a new pizza restaurant that opened two years ago in Seksyen 7, Shah...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Deli Pizza is a new pizza restaurant that opened two years ago in Seksyen 7, Shah Alam. The restaurant is near to a college campus and some of the part-time workers are students from the college. The owner of Deli Pizza, Mr. Hady is concern about the stock level of its restaurant, particularly cheese as the most expensive material in making pizza. Mr. Hady wants to ensure that the cheese inventory is sufficient as needed and there is no stock surplus that will increase holding cost. Mr. Hady has asked one of his part-time workers who is also a final year accounting student, regarding any formal model to order the cheese. The staff has suggested to use the Economic Order Quantity (EOQ) model in planning inventory. Currently the cheese is ordered in blocks at RM17.50 per block at order size of 400 blocks. Each year the restaurant uses an average 14,000 blocks of cheese. The cost of carrying one block of cheese is 10% of its purchase price. It costs the restaurant RM40 to place and receive an order. Required: a. Based on the current order size, calculate the total cost of ordering and carrying the cheese. (4 marks) b. Determine the order size of the cheese if the restaurant were to change to the EOQ model. (3 marks) c. If the restaurant uses the EOQ model, how many numbers of orders per year? How does this compare to the current reorder policy? (3 marks) Deli Pizza is a new pizza restaurant that opened two years ago in Seksyen 7, Shah Alam. The restaurant is near to a college campus and some of the part-time workers are students from the college. The owner of Deli Pizza, Mr. Hady is concern about the stock level of its restaurant, particularly cheese as the most expensive material in making pizza. Mr. Hady wants to ensure that the cheese inventory is sufficient as needed and there is no stock surplus that will increase holding cost. Mr. Hady has asked one of his part-time workers who is also a final year accounting student, regarding any formal model to order the cheese. The staff has suggested to use the Economic Order Quantity (EOQ) model in planning inventory. Currently the cheese is ordered in blocks at RM17.50 per block at order size of 400 blocks. Each year the restaurant uses an average 14,000 blocks of cheese. The cost of carrying one block of cheese is 10% of its purchase price. It costs the restaurant RM40 to place and receive an order. Required: a. Based on the current order size, calculate the total cost of ordering and carrying the cheese. (4 marks) b. Determine the order size of the cheese if the restaurant were to change to the EOQ model. (3 marks) c. If the restaurant uses the EOQ model, how many numbers of orders per year? How does this compare to the current reorder policy? (3 marks)
Expert Answer:
Answer rating: 100% (QA)
Required a I Ordering cost Annual Usage x ordering cost per order Order size Ordering cost 14000 ... View the full answer
Related Book For
Accounting Information Systems The Processes and Controls
ISBN: 978-1118162309
2nd edition
Authors: Leslie Turner, Andrea Weickgenannt
Posted Date:
Students also viewed these organizational behavior questions
-
Tyrus bought a trailer two years ago in which to transport his bronco horses to rodeos and other events. The trailer, which had no salvage value , cost him $20,000 and was depreciated by the...
-
Identify an existing organisation in an industry of your choice. The organisation can be either a profit or non-profit seeking organisation. If it is necessary, you may use a fictitious name for the...
-
College Town Pizzas owner bought his current pizza oven two years ago for $10,500, and it has one more year of life remaining. He is using straight-line depreciation for the oven. He could purchase a...
-
Perhaps more surprising to Mr. Pitkin was a proposal by the VP of Marketing to make a major investment in market share by increasing promotional expenditures by $2.5 million during 1998-2000. Sales...
-
Should employers concern themselves with the credit histories of applicants? Current employees? Only for jobs with significant financial responsibility? If someone has a bad credit history or low...
-
1. Analyze your group in terms of agents of change (AC1's, AC2's, and AC3's), using the following steps to guide your analysis: Who are the AC2's and AC3's within your group? Justify your views with...
-
Suppose that your true weight is 102.4 pounds. The scale at the doctors office, which can be read only to the nearest quarter pound, says that you weigh 102-1/4 pounds. The scale at the gym, which...
-
Kester Electronics had a fixed factory overhead budget for 20X0 of $72 million. The company planned to make and sell 9 million units of a particular communications device. All variable manufacturing...
-
Suppose you are playing Scrabble and have the tiles B, L, O, U, T, H, and E, and you have to play the first word. (a) How many permutations of the tiles are there? (b) There are no 7-letter or...
-
Lavare, located in the Chicago suburbs, is a major manufacturer of stainless steel sinks. Lavare is in the middle of the demand and supply planning exercise for the coming year. Anticipated monthly...
-
3 (b) Give the systematic IUPAC names for each of the following complexes/1ons (1) [Fe(CO)s} (11) [Cr(H2O)3(NH3)2CI]* () [Mo(NO2)2(CN)4] (iv) (NH4)2[Cu(ox)2] (v) [N:(en)3]Cl2
-
One of the issues that is debated in virtually every election is whether to raise the federal minimum wage, which stood at $7.25 per hour in 2018. Suppose that you are married with a child, working a...
-
How would you expect the possibility of differentiating your product to change competition between oligopolists?
-
The 2018 federal poverty guidelines used to determine eligibility for Medicaid and the Childrens Health Insurance Program (CHIP) set a poverty line of $25,100 for a family of four in the 48...
-
As corruption falls in a country, cost of production often falls. Why?
-
Conduct an online search for iPhone repair San Diego You will find about 10 million entries. Now try iPhone screen repair San Diego. You will find more than 6 million entries. Try to estimate the...
-
What is the purpose of using speaker notes in a presentation? O To let the audience read along while you speak O To write down what you want to say about each slide 4 To introduce the presentation so...
-
Determine the annual percentage yield for a loan that charges a monthly interest rate of 1.5% and compounds the interest monthly.
-
Why would the training of employees be an impediment to updating legacy systems?
-
Identify whether each of the following accounting positions or duties involves authorization, recording, or custody: Cashier Payroll processor Credit manager Mailroom clerk Data entry clerk ...
-
Describe the purpose of each of the following parts of a manual system: a. Source document b. Turnaround document c. General ledger d. General journal e. Special journal f. Subsidiary ledger
-
Consider a sequence of random variables \(\left\{X_{n}ight\}_{n=1}^{\infty}\) where \(X_{n}\) has probability distribution function \[f_{n}(x)= \begin{cases}{[\log (n+1)]^{-1}} & x=n \\ 1-[\log...
-
Suppose that \(\left\{X_{n}ight\}_{n=1}^{\infty}\) is a sequence of independent random variables from a common distribution that has mean \(\mu\) and variance \(\sigma^{2}\), such that...
-
Let \(\left\{X_{n}ight\}_{n=1}^{\infty}\) be a sequence of random variables such that \[E\left(\sup _{n \in \mathbb{N}}\left|X_{n}ight|ight)
Study smarter with the SolutionInn App