Question
In: Accounting
2). WZY processing company uses 2,400 units of a product per year on a continuous basis....
2). WZY processing company uses 2,400 units of a product per year on a continuous basis. The product carrying costs are RM60 per year and ordering costs are RM252.05 per order. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory.
(a) Calculate the economic order quantity.
(b) Calculate the total cost per year to order and carry this item.
(c) If WZY company increases its order quantity by 58 units it will get a discount.
i). Calculate the total cost at new level
ii). How much is the discount that the supplier will offer WZY company to result in a net benefit to the company.
9 MARKS
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Weighted Average Process Costing Minot Processing Company manufactures one product on a continuous basis in two...
Weighted Average Process Costing
Minot Processing Company manufactures one product on a continuous
basis in two departments, Processing and Finishing. All materials
are added at the beginning of work on the product in the Processing
Department. During November 2017, the following events occurred in
the Processing Department:
Units started
17,000 units
Units completed and transferred to Finishing Department
14,500 units
Costs assigned to processing
Raw materials (one unit of raw materials for each unit of
product started)
$296,200
Manufacturing supplies...
Weighted Average Process Costing Minot Processing Company manufactures one product on a continuous basis in two...
Weighted Average Process Costing
Minot Processing Company manufactures one product on a continuous
basis in two departments, Processing and Finishing. All materials
are added at the beginning of work on the product in the Processing
Department. During November 2017, the following events occurred in
the Processing Department:
Units started
17,000 units
Units completed and transferred to Finishing Department
14,500 units
Costs assigned to processing
Raw materials (one unit of raw materials for each unit of
product started)
$296,200
Manufacturing supplies...
Weighted Average Process Costing Minot Processing Company manufactures one product on a continuous basis in two...
Weighted Average Process Costing
Minot Processing Company manufactures one product on a continuous
basis in two departments, Processing and Finishing. All materials
are added at the beginning of work on the product in the Processing
Department. During December 2009, the following events occurred in
the Processing Department:
Units started
16,000 units
Units completed and transferred to Finishing Department
15,000 units
Costs assigned to processing:Raw materials (one unit of raw
materialsfor each unit of product started)
$142,900
Manufacturing supplies used
18,000...
Weighted Average Process Costing Minot Processing Company manufactures one product on a continuous basis in two...
Weighted Average Process Costing
Minot Processing Company manufactures one product on a
continuous basis in two departments, Processing and Finishing. All
materials are added at the beginning of work on the product in the
Processing Department. During November, the following events
occurred in the Processing Department:
Units started
20,000 units
Units completed and transferred to Finishing Department
21,000 units
Costs assigned to processing
Raw materials (one unit of raw materials for each unit of
product started)
$350,000
Manufacturing supplies used...
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17.14
24
12
10
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is shown below:
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direct labor .................. 24.70
variable overhead ............. 2.10
fixed overhead ................ 27.40
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Direct labour
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Variable manufacturing overhead
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Fixed manufacturing overhead
24.70
Unit product cost
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An outside supplier has offered to sell the company all of these
parts it needs for $46.20 a unit. If the company accepts this
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