New type of body temperature thermometer

Assignment Help Financial Management

Reference no: EM131976887

Medical Corporation of America sells a new type of body temperature thermometer. The company expects to sell 20,400 thermometers at a selling price of $80 per unit. The company maintains a safety stock of 1,400 units to eliminated stock-outs. The manager would like to cut costs as much as possible and decided to implement the EOQ inventory management system to minimize the total costs of inventory. Ordering cost is $120 per order and each unit costs $4 to carry. (PLEASE SHOW YOUR WORK).

a) What is the economic order quantity?

b) What is the amount of average inventory?

c) How many orders will be made per year?

d) What is the total cost of this inventory decision?

Reference no: EM131976887

Questions Cloud

Prepare the journal entries for the companys transactions : What was the net realizable value of the receivables as at December 31,2015. Prepare the journal entries for the company's 2016 transactions.

What is the estimated floor price of the convertible : Florida Enterprises is considering issuing a 15-year convertible bond that will be priced at its $1,000 par value. The bonds have an 6.0 percent annual coupon.

Prepare a schedule to compute both basic and diluted earning : The Simon Corporation issued 10-year, $5,000,000 par, 7% callable convertible. Prepare a schedule to compute both basic and diluted earnings per share.

Compare the firms capital structure : Calculate the firms after-tax Weighted Average Cost of Capital - Critically evaluate the extent to which the firm has been successful in maximising wealth

New type of body temperature thermometer : Medical Corporation of America sells a new type of body temperature thermometer. What is the total cost of this inventory decision?

Find what would be the maximum purchase price acceptable : What would be the maximum purchase price acceptable to Silven Industries? Based on the above calculations, should Silven Industries make or buy the boxes?

Why you made the decision to pursue an mba : Describe how and why you made the decision to pursue an MBA. In the description,include calculations of expenses and opportunity costs related to that decision.

Considering two saving options : You are considering two saving options. Both options offer a rate of rate of return of 11 percent.

Mountain health system additional net income from new sales : Calculate Mountain Health System’s additional net income from the new sales.

User Account

All Pages