Question

In: Finance

1. Michael's Mechanical sells 6,000 jettison machines annually. Each machine costs Michael's $2000 to purchase, inventory...

1. Michael's Mechanical sells 6,000 jettison machines annually. Each machine costs Michael's $2000 to purchase, inventory carrying costs are 30% of the purchase price, and the cost of placing an order with its supplier is $120. (a) What is the EOQ? (b) What is the total inventory cost at the EOQ?

Solutions

Expert Solution

No of machines can not be in fraction, so EOQ is rounded to 49 machines. Annual inventory cost is rounded to 2 decimals. Any change, needed let me know. Thank you

jeff jeffy answered 9 months ago
Next > < Previous

Related Solutions

"You purchase a machine. It costs $47,000 to purchase, $8,000 to install, and $6,000 for its...
"You purchase a machine. It costs $47,000 to purchase, $8,000 to install, and $6,000 for its freight with a 7-year life. Use the DDB method (multiplier 2) switching to straight line depreciation if appropriate. Salvage value is $13,000. Determine the book value at the end of year 3."
A company is contemplating to purchase a machine. Two machines A & B are available each...
A company is contemplating to purchase a machine. Two machines A & B are available each costing $ 500,000. In computing profitability of the machines a discounted rate of 10% is to be used. Cash Flows (Rs) Year Machine A Machine B 1 1,50,000 50,000 2 2,00,000 1,50,000 3 2,50,000 2,00,000 4 1,50,000 3,00,000 5 1,00,000 2,00,000    Using NPV Method, indicate which m/c would be profitable?
A company is contemplating to purchase a machine. Two machines A & B are available each...
A company is contemplating to purchase a machine. Two machines A & B are available each costing $ 500,000. In computing profitability of the machines a discounted rate of 10% is to be used. Cash Flows (Rs) Year Machine A Machine B 1 1,50,000 50,000 2 2,00,000 1,50,000 3 2,50,000 2,00,000 4 1,50,000 3,00,000 5 1,00,000 2,00,000    Using NPV Method, indicate which m/c would be profitable?
Michael's Machine Shop reports the following information for the quarter. Sales price $ 90 Fixed costs...
Michael's Machine Shop reports the following information for the quarter. Sales price $ 90 Fixed costs (for the quarter) Selling and administrative 47,700 Production 143,100 Variable cost (per unit) Materials 22 Labor 19 Plant supervision 12 Selling and administrative 13 Number of units (for the quarter) 23,850 units Required: Select the answer for each of the following costs. a. Variable cost per unit. b. Variable production cost per unit. c. Full cost per unit. d. Full absorption cost per unit....
1. Annadark Corp is considering the purchase of a machine that costs $1,300,000. The machine will...
1. Annadark Corp is considering the purchase of a machine that costs $1,300,000. The machine will be depreciated using a five year MACRS schedule with half-year convention (Refer to the MACRS Schedule handout). Annadark plans to sell the machine after four years and expects the sale price at that time to be $540,000. Corporate tax rate of 21% applies to Annadark. This machine is expected to add $450,000 in revenue each year. a. What will be the depreciation on the...
1. Annadark Corp is considering the purchase of a machine that costs $1,300,000. The machine will...
1. Annadark Corp is considering the purchase of a machine that costs $1,300,000. The machine will be depreciated using a five year MACRS schedule with half-year convention (Refer to the MACRS Schedule handout). Annadark plans to sell the machine after four years and expects the sale price at that time to be $540,000. Corporate tax rate of 21% applies to Annadark. This machine is expected to add $450,000 in revenue each year. a. What will be the depreciation on the...
1. A factory manufactures machines. Each machine is defective with probability 1/100, independently. The machines get...
1. A factory manufactures machines. Each machine is defective with probability 1/100, independently. The machines get numbered 1, 2, . . . as they’re produced (a) Out of machines 1, . . . , 1000, what is the probability that none are defective? (b) Out of machines 1, . . . , 1000, what is the probability that two or fewer are defective? (c) Out of machines 1, . . . , 1000, what is the probability that exactly ten...
"Compute the depreciation each year of a machine that costs $30,000 to purchase and $5,300 to...
"Compute the depreciation each year of a machine that costs $30,000 to purchase and $5,300 to install with 10 years of life. Use DDB method (multiplier = 2) switching to straight line depreciation when appropriate. Assume a salvage value of $0. How much should be depreciated in year 9?"
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs. T. True F. False 2- The Economic Order Quantity (EOQ) model tells us........ A. how much to order B. which are higher - holding or ordering costs C. how to use price discounts D. when to order 3- When tracking or counting inventory items, we should focus on which items most? A. A-items B. B-items C. C-items D. D-tems 4- The Economic Order Quantity...
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs. T. True F. False 2- The Economic Order Quantity (EOQ) model tells us........ A. how much to order B. which are higher - holding or ordering costs C. how to use price discounts D. when to order 3- When tracking or counting inventory items, we should focus on which items most? A. A-items B. B-items C. C-items D. D-tems 4- The Economic Order Quantity...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT