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A fast-food restaurant buys hamburger buns from a local bakery. To estimate its costs, the restaurant assumes now those buns are used at the constant rate of 100 per day and are purchased at $0.025 per bun. It costs $1 for each order placed and the annual inventory holding cost per unit is 25% of the unit purchase cost. Work on Excel
Problem a) How much should be ordered (in whole number) each time to minimize the restaurant's total annual costs?
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Determine the actual materials cost incurred for the manufacture of 5,000 finished units, and compute the total materials variance.
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