Your company manufactures toy cars for retail stores. When your customers place the order for toy...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Your company manufactures toy cars for retail stores. When your customers place the order for toy cars, you use a trucking company to ship the orders to them. The trucking company publishes the following rates (per 100 pounds): Weight 0-499 lbs. 500-999 lbs. 1,000-1,499 lbs. 1,500-1,999 lbs. 2,000 lbs. or more 2-Day $77.25 $75.50 $73.75 $72.25 $70.75 Cost per 100 pounds 7-Day $40.50 $38.25 $35.75 $32.50 $30.25 (a) One of your customers ("Store 1") placed an order of 650 toy cars for the upcoming holiday season. Find the total shipment cost (shipping + transit inventory holding) for the order for 2-day shipping method and 5-day shipping method. Each toy car weighs 3 pounds and is worth $300. The annual inventory holding rate is 45%. Which shipping method should you choose? (b) Your company also received orders from two other retail stores. Store 2 placed an order of 300 toy cars, and Store 3 placed an order of 480 toy cars. Stores 1, 2, and 3 are all located in the same area and therefore the trucking company offers to consolidate the three orders into one shipment for an additional charge of $50 for each stop it is required to make. Should you consolidate if you use 5-day shipping method? (c) How would the consolidation decision from part (b) change the inventory holding cost? That is, if you decide to consolidate, how would the holding cost change compared to if you ship the orders individually (holding cost for 5- day consolidated shipment vs holding cost for 5-day individual shipments)? (d) If the value density of your shipment is lower, how would the shipping and transit inventory holding costs change? Why? Your company manufactures toy cars for retail stores. When your customers place the order for toy cars, you use a trucking company to ship the orders to them. The trucking company publishes the following rates (per 100 pounds): Weight 0-499 lbs. 500-999 lbs. 1,000-1,499 lbs. 1,500-1,999 lbs. 2,000 lbs. or more 2-Day $77.25 $75.50 $73.75 $72.25 $70.75 Cost per 100 pounds 7-Day $40.50 $38.25 $35.75 $32.50 $30.25 (a) One of your customers ("Store 1") placed an order of 650 toy cars for the upcoming holiday season. Find the total shipment cost (shipping + transit inventory holding) for the order for 2-day shipping method and 5-day shipping method. Each toy car weighs 3 pounds and is worth $300. The annual inventory holding rate is 45%. Which shipping method should you choose? (b) Your company also received orders from two other retail stores. Store 2 placed an order of 300 toy cars, and Store 3 placed an order of 480 toy cars. Stores 1, 2, and 3 are all located in the same area and therefore the trucking company offers to consolidate the three orders into one shipment for an additional charge of $50 for each stop it is required to make. Should you consolidate if you use 5-day shipping method? (c) How would the consolidation decision from part (b) change the inventory holding cost? That is, if you decide to consolidate, how would the holding cost change compared to if you ship the orders individually (holding cost for 5- day consolidated shipment vs holding cost for 5-day individual shipments)? (d) If the value density of your shipment is lower, how would the shipping and transit inventory holding costs change? Why?
Expert Answer:
Answer rating: 100% (QA)
a 2Day Shipping Weight 650 toy cars x 3 lbscar 1950 lbs Cost 1950 lbs x 7725100 lbs 150413 Transit Inventory Holding Cost 150413 x 45 67619 Total Cost ... View the full answer
Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman
Posted Date:
Students also viewed these mathematics questions
-
Oivio Company manufactures toy cars and has developed the following flexible budget for overhead for the coming year. Activity level is measured in direct labour hours. The company produces two...
-
A trucking company publishes the following rates: Shipment Weight ................................................. Cost per 100 Pounds Less than 500 lbs...
-
A 1200 kg car is accelerated from 30 to 50 km/h in 5 s. How much work is that? If you continue from 50 to 70 km/h in 5 s is that the same?
-
Each team member is to become an expert on one depreciation method to facilitate teammates' understanding of that method. Follow these procedures: a. Each team member is to select an area of...
-
Effective financial statement analysis requires an understanding of a firms economic characteristics. The relations among various financial statement items provide evidence of many of these economic...
-
Suppose a friend of yours decides to write a novel. Explain how ideas and objects are involved in this process. Where do nonrivalry and increasing returns play a role? What happens if the novel is...
-
Visit the Center for Internet Security Web site (www.cisecurity.org) and down load the appropriate scoring tool for your computer. Run the tool to assess how well your computer conforms to the...
-
Rene Rogers has adjusted gross income of $40,000. She has medical expenses of $5,000 and $3,000 of miscellaneous itemized deductions subject to the two-percent-of-AGI limit. In addition, she has a...
-
From discussions with your broker, you have determined that the expected inflation premium is 1.35 percent next year, 1.50 percent in year 2, 1.75 percent in year 3, and 2.00 percent in year 4 and...
-
Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate is 80% of direct materials cost. Transferred Job 201 to Finished Goods Inventory. (1) Sold Job 201 for $167,060 on...
-
For the following statements, state Agree or Disagree. And provide brief explanations. More than half of the money issues by the government is actually held by people in foreign countries. Australia...
-
How can decision-makers manage resistance and overcome inertia when implementing significant changes within an organization?
-
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 918 $ 992 Expenses 772 806 Pretax accounting income (income statement) $ 146 $ 186 Taxable income (tax...
-
related to basic earnings per share. Fill in the missing information. On its Form 10-K for the year ended December 31, 2018, Bank of America Corp. reported information 2018 2017 2016 $ millions,...
-
How a defendant moves through the criminal justice system from arrest to sentencing. In little words, what is one step of the process to the next for each of the following: Arrest Arraignment...
-
Journalize entries for the following related transactions of Lilly Heating & Air Company using the net method under a perpetual inventory system. ( If an amount box does not require an entry, leave...
-
QUESTION 2: Turbine Steam flows steadily through a turbine. The mass flow rate of the steam entering the turbine is 15 kg/s and the velocity of the inlet is 10 m/s (state 1). The inlet conditions of...
-
In Exercises discuss the continuity of each function. f(x) -3 1 x - 4 y 3 2 -1 -2 -3+ 3 X
-
Cohen Sounds produces two automotive subwoofers: S12L7 and S12L5. Projected sales (number of speakers) for the coming five quarters are as follows: The vice-president of sales believes that the...
-
a. Dr. Lee, a dentist, wants to increase the size and profitability of his business by building a reputation for quality and timely service. b. To achieve this, he plans on adding a dental laboratory...
-
Flex Company uses activity-based costing to determine the costs of its products. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:...
-
C. Gomez, corporate engineer of Allied Products Ltd. is proposing the replacement of existing equipment with more efficient equipment. According to information received by Gomez, the proposed...
-
Match each of the following descriptions, a through \(h\), with a capital budgeting method: (1) payback method, (2) net present value, (3) profitability index, or (4) internal rate of return. More...
-
SavingsPlus Inc. is considering an investment in computer technology. The project would require an initial investment of \(\$ 240,000\) and have an expected life of six years with no salvage value....
Study smarter with the SolutionInn App