Question
In: Accounting
A supplier to your company has offered you a reduced price per unit on a component...
A supplier to your company has offered you a reduced price per unit on a component if you agree to purchase the component in higher order quantities.? Currently, you order 8,000 units each time an order is placed for the? component, and you pay ?$7.00 per unit. Your ordering costs are estimated to be ?$72 per order regardless of the order size. Transportation costs are estimated to be ?$0.30 per unit. Your cost to hold a component part in inventory is estimated at 22% annually based on the cost of the purchased item. The supplier has offered you a cost of ?$5.80 per unit if you increase your purchasing quantity to 12,000. ?Currently, your company purchases 101,000 of these components? annually, and this total demand is expected to remain constant for the foreseeable future. Should you continue with your current? policy, or should you take the incentive offered by the? supplier?
A. The total landed cost with the order quantity size of 8,000 units is?
B. The total landed cost with the bulk ordering quantity of 12,000 units is?
C. Based on the landed cost tradeoff? calculations, the company should choose the?
Solutions
Expert Solution
Please Find the Workings and do revert for any clarifications.
:)
ekkarill92 answered 1 year agoRelated Solutions
Your company purchases an expensive component from a supplier. You know that the population of the...
Your company purchases an expensive component from a supplier.
You know that the population of the components is normally
distributed with a mean ( μ) of 60 months and a standard deviation
(σ) of 2 months. Using this information determine:
the probability of a component lasting longer than 68
months.
the probability of a component lasting less than 63
months.
the probability that a component will last between 58 and 65
months.
Using the information in the problem above, what...
A company has the following information: Unit sales 13,400 Sales price per unit $...
A company has the following information:
Unit sales
13,400
Sales price per unit
$ 90.00
Variable costs per unit $ 40.00
Fixed costs $
500,000
A. What is the company’s contribution margin per unit? B. What
is the company’s total contribution margin? C. What is the
company’s operating income? D. What is the company’s margin of
safety in units? E. If the company had a target operating income of
$636,000, what would be the target sales in...
1) Weatherspoon Company has a product with a selling price per unit of $200, the unit...
1) Weatherspoon Company has a product with a selling
price per unit of $200, the unit variable cost is $110, and the
total monthly fixed costs are $300,000. How much is Weatherspoon’s
contribution margin per unit?
a. $ 90 b. $110 c. $200 d. $300
2) An Italian bakery on Franklin Avenue in Hartford is
famous for its cakes. The bakery sells its cakes for $19.95 to the
public. The cost for the ingredients and labor to make the cake...
1 If your variable cost per unit INCREASED, then your A selling price per unit would...
1 If your variable cost per unit INCREASED, then
your
A selling price per unit would decrease.
B break-even units would decrease.
C selling price per unit would increase.
D break-even units would increase.
2 Which of the following explains the key difference
between a traditional income statement and a contribution margin
income statement?
A Only the traditional income statement can correctly compute
net income.
B Only the contribution margin income statement can correctly
compute net income.
C Only the...
A company purchases a particular component from an external supplier. The demand for the component is...
A company purchases a particular component from an external
supplier. The demand for the component is estimated to be 475 units
per month. The cost of placing an order with the supplier is £500.
The component can be purchased from the supplier at a price per
unit of £63 if so desired. However the supplier also offers a
quantity discount such that if the company orders 800 or more in
each order the price per unit is only £60. The...
Peeler's Smoothie Company has provided the following information: Sales price per unit Variable cost per unit...
Peeler's Smoothie Company has provided the following
information: Sales price per unit Variable cost per unit Fixed
costs per month Calculate the contribution margin ratio. (Round
your answer to two decimal places.)
A. 28.57%
B. 22.22%
C. 20%
D. 77.78%
Benson Company manufactures special metallic materials for
luxury homes that require highly skilled labor. Benson uses
standard costs to prepare its flexible budget. For the first
quarter of the year, direct materials and direct labor standards
for one of their...
Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and...
Steven Company has fixed costs of $239,080. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products are provided below.
Product
Selling Price
per unit
Variable Cost
per unit
Contribution Margin
per unit
X
$1,248
$468
$780
Y
473
253
220
The sales mix for products X and Y is 60% and 40% respectively.
Determine the break-even point in units of X and Y combined. Round
answer to nearest whole number.
units...
Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and...
Steven Company has fixed costs of $239,080. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products are provided below.
Product
Selling Price
per unit
Variable Cost
per unit
Contribution Margin
per unit
X
$1,248
$468
$780
Y
473
253
220
The sales mix for products X and Y is 60% and 40% respectively.
Determine the break-even point in units of X and Y combined. Round
answer to nearest whole number.
units
1). MMY Company purchased a new machine for RM1,000,000 on credit. The supplier has offered the...
1). MMY Company purchased a new machine for RM1,000,000 on
credit. The supplier has offered the term of credit of 2/10, net
45. The current interest rate the bank is offering is 16
percent.
(a) Calculate the cost of not accepting cash discount.
(b) Should the firm take or give up the cash discount?
(c) What is the effective rate of interest if the firm decides
to take the cash discount by borrowing money on a discount
basis?
the More Company have 12% operating income per unit on the sales. price per unit. The...
the More Company have 12% operating income per unit on the
sales. price per unit. The
managerial . reported that the target price is $750 per unit.
1‘ Compute the target operating income per unit
2. It" the company would like to have total profit to be $450,000,
how many units, would they have to
sell given the desired 12% operating income per unit?
3 Compute the target cost per unit at the 12% target operating
income per unit.
t...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Enumerations Create an advanced enumeration to represent months (JANUARY – DECEMBER) called enuMonths Add internal properties...
- What is the minimum size of the automorphism group of a simple directed graph having more...
- The birthday paradox says that the probability (chance) that two people in a room will have...
- #include <iostream> #include "lib.hpp" using namespace std; int main() { // declare the bool bool...
- Why do we compare means instead of individual scores? for comparing average SAT test scores across...
- NPV Your division is considering two projects with the following cash flows (in millions): 0...
- The equivalent synchronous impedance of a 25kVA, 400V three-phase Y-connected synchronous generator is 0.05 + j1.6...
ADVERTISEMENT