Calculate the eoq for heavy-duty tyres

Assignment Help Cost Accounting
Reference no: EM13936763

EOQ, cost of prediction error.

Ronald van Hooijdonk is the owner of a truck repair shop. He uses an EOQ model for each of his truck parts. He initially predicts the annual demand for heavy-duty tyres to be 2000. Each tyre has a purchase price of €50. The incremental ordering costs per purchase order are €40. The incremental carrying costs per year are €4 per unit plus 10% of the supplier's purchase price.

Required

1. Calculate the EOQ for heavy-duty tyres, along with the sum of annual relevant ordering costs and carrying costs.

2. Suppose van Hooijdonk is correct in all his predictions except the purchase price. (He ignored a new law that abolished tariff duties on imported heavy-duty tyres, which led to lower prices from foreign competitors.) If he had predicted events correctly, he would have foreseen that the purchase price would drop to €30 at the beginning of the year and then remain unchanged throughout the year. What is the cost of the prediction error?

Reference no: EM13936763

Questions Cloud

How has the use of recombinant dna technology : How has the use of recombinant DNA technology added to the treatment of the disorder? How has the treatment affected the long-term quality of life and long-term outlook of people with the disorder?
Contemporary internal information system : You should complete the following tasks for the given business scenario. You are one of a team of newly graduated software engineers working on a project to build the infrastructure of an organization with an intensive and data sensitive internal ..
Annual show in yeppoon for the show holiday : The Yeppoon and District Show Society Inc organizes an annual show in Yeppoon for the Show Holiday. This year it was organized on the 6th and 7th June 2015 and attracted over 10000 people.
What is the order of the genes on the chromosome : Calculate the recombination frequencies of each region. Then draw a chromosome map of the alleles, giving distances between each allele (use the first letter of each word as the allele designation). What is the total distance?
Calculate the eoq for heavy-duty tyres : What is the cost of the prediction error? Calculate the EOQ for heavy-duty tyres, along with the sum of annual relevant ordering costs and carrying costs.
Discuss the value of visual art for individual and society : Discuss the value of visual art for an individual and society. Analyze the essential relationship between any work of art and the various kinds of influences on the artist and audience that shape the interpretation of the art
Create a class called card player and deck : Write a class called "Card" with the following traits: it holds two private variables, a suit and a value (ace is high). It has public functions that randomly generate and modify the suit, value and print out the suit/value to the screen. Write a ..
Introduce a few areas of programming using c : In this project it was required to write a small Notepad program and it will introduce a few areas of programming using C# (which are very important in many programs), including: Windows Forms and the Event Handling model GUI (Graphical User Inter..
Research on woolworths supermarket : Students must research Woolworth's Supermarket. Students are to write an Integrated CRM Strategy Plan in Report Format.

Reviews

Write a Review

Cost Accounting Questions & Answers

  What was the firms cash flow

What was the firm's cash flow to creditors during 2008?

  Does dula gibbon have an ethical dilemma

Does Dula Gibbon have an ethical dilemma? If so, what is it? What are her options? How would you solve her problem? Be prepared to defend your answer.

  What amount of tax can the irs require jasper

What amount of tax can the IRS require Jasper to pay for the Dahvills year 2 joint return and what amount of tax can the IRS require Jasper to pay for Crewellas year 3 separate tax return?

  Financial analysis is the task of financial analyst

Financial analysis is the task of financial analyst and his role is to analyze whether the entity is solvent, stable, profitable or liquid enough to be invested in.

  Evaluate the effectiveness of regulations such as

evaluate the effectiveness of regulations such as sarbanes-oxley act over minimizing the corporate fraud and protecting

  Determine the amount of telephone expense

Determine the amount of telephone expense that should be allocated to each of the three departments and determine the amount of office expense that should be allocated to Department 3.

  Determine the amount of cash received by the club

Prepare journal entries for each of the following events that took place during 2012 and determine the amount of cash received by the Club from the above transactions during the year ended September 30, 2012.

  Calculate the net present value of the proposed investment

(a.) Calculate the net present value of the proposed investment. Ignore income taxes, and round all answers to the nearest $1.

  Prepare a statement of net assets for the year

Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2011 and prepare a statement of net assets for the year ended June 30, 2011.

  Irmas interiors uses a job order costing system to collect

irmas interiors uses a job order costing system to collect the costs of its interior decorating business. each clients

  Describe the current costing system

Describe the current costing system and list the potential weaknesses of this system regarding product costing accuracy and cost control and describe the proposed ABC system, the benefits from using it and why those benefits occur.

  Assume that three accountants have been selected to measure

assume that three accountants have been selected to measure the net income of a firm under u.s. generally accepted

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd