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Surf's Up makes surfboards from balsam wood. Standards for one surfboard are 6.8 board feet of balsam at a cost of $6.20 per foot. During the most recent month of operations, Surf's Up purchased 60,000 board feet of balsam wood for $366,000 and produced 8,200 surfboards. At the end of the month, Surf's Up had 4,000 board feet of balsam wood in inventory. Using the model below, compute the materials price variance and the materials quantity variance and indicate whether the variances are favorable or unfavorable.
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Ben would like to use an inventory system that minimizes inventory cost and will satisfy 95 percent of his customers who order this wine. a. What is the economic order quantity for Ben to order?
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