Kingston Distributors Inc. has Total sales of 80,000 units and an economic ordering quantity (EOQ) of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Kingston Distributors Inc. has Total sales of 80,000 units and an economic ordering quantity (EOQ) of 4,000 units. The firm's ordering cost is $400 per order. Other costs associated with inventory are as follows: Storage Handling Insurance $0.50 per unit 1.60 per unit 1.90 per unit Required: a) If Kingston Distributors increases their annual sales to 100,000 units, what will its new Economic Ordering Quantity be? (3 marks) b) How much is the firm's total inventory cost increase when its EOQ changes? (6 marks) c) By how much would the firm's total inventory cost increase if they have safety stock of 6,000 units (1 marks) Kingston Distributors Inc. has Total sales of 80,000 units and an economic ordering quantity (EOQ) of 4,000 units. The firm's ordering cost is $400 per order. Other costs associated with inventory are as follows: Storage Handling Insurance $0.50 per unit 1.60 per unit 1.90 per unit Required: a) If Kingston Distributors increases their annual sales to 100,000 units, what will its new Economic Ordering Quantity be? (3 marks) b) How much is the firm's total inventory cost increase when its EOQ changes? (6 marks) c) By how much would the firm's total inventory cost increase if they have safety stock of 6,000 units (1 marks)
Expert Answer:
Answer rating: 100% (QA)
a After expanding their annual sales to 100000 units Kingston distributors Inc can utilize the EOQ calculation to determine their new Economic Orderin... View the full answer
Related Book For
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
Posted Date:
Students also viewed these finance questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? Do a [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in the textfor...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Resolve the force F1 into components acting along the u and v axes and determine the magnitudes of the components. Given: F1 = 250 N F2 = 150 N θ1 = 30 deg θ2 = 30 deg θ3 = 105 deg...
-
On January 2, 2006, Bradley Company acquired 20% of the 100,000 shares of outstanding common stock of Caldecott Corp. for $20 per share. The purchase price was equal to Caldecotts underlying book...
-
Danny Diver weighs 500 N and steps off a diving board 10 m above the water. Danny hits the water with how much of kinetic energy ?
-
With reference to the previous exercise, find a \(90 \%\) confidence interval for the difference of the two means. Data From Previous Exercise 8.26 With reference to Exercise 2.64, test that the mean...
-
Waco Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes Waco to issue 80,000 shares of 10%, $100 par value cumulative...
-
ABCD is a square of 2m side. Forces 5kN, 3kN, 10kN, 8kN, 16kN are acting along AB, BC, CD, DA and diagonal AC respectively. Find the resultant force for the system.
-
Suppose that Kate and Anne enter into a pooling arrangement. Assume that both women have the following loss distributions and that losses are independent. $50,000 with probability of 0.005 $20,000...
-
The statistics below show standard deviation, correlation with the market and weights for a portfolio consisting of four securities. SD (s i ) Correlation (r i,M ) Weight Xero Ltd 20% 0.75 23%...
-
R.J. Reynolds is considering a 25-billion yen debenture to be issued at 101. 50 percent of par. The five-year, annual coupon bond would pay an interest rate of 734 percent denominated in yen, but the...
-
Define in your own words what is meant by globalization.
-
Is there such a thing as an Islamic bond?
-
Why is the foreign exchange market often referred to as the market that never sleeps?
-
What is unique about valuing cross-border acquisitions? What valuation methodology would you recommend?
-
Beyer Company is considering buying an asset for $360,000. It is expected to produce the following net cash flows. Year 1 Year 5 $80,000 $13,000 Net cash flows Year 2 $50,000 Year 3 $70,000 Year 4...
-
What are bounds and what do companies do with them?
-
When setting prices, it is important to define the product and market correctly. Do you agree with this statement? Provide an example to illustrate your answer.
-
Explain the difference between the control purpose and the product costing purpose of standard costing?
-
Jackson Sausages Pty Ltd is a medium-sized company that produces gourmet beef and, chicken sausage for a highly competitive market. Jackson's sausages are sold to major supermarket chains, as well as...
-
The swinging spring is an example of a two degree-of-freedom system with a cubic nonlinearity. Indicate whether the statement presented is true or false. If true, state why. If false, rewrite the...
-
The period of free vibrations of a nonlinear system depends upon initial conditions. Indicate whether the statement presented is true or false. If true, state why. If false, rewrite the statement to...
-
A mass attached to a linear spring sliding on a surface with Coulomb damping is an example of a nonlinear system. Indicate whether the statement presented is true or false. If true, state why. If...
Study smarter with the SolutionInn App