What is the economic order quantity and shortage costs

Assignment Help Financial Management

Reference no: EM131304731

1. ABC Company sells 3,807 chairs a year at an average price per chair of $180. The carrying cost per unit is $20.38. The company orders 230 chairs at a time and has a fixed order cost of $97.3 per order. The chairs are sold out before they are restocked. What are the total shortage costs?

2. ABC Company sells 2,942 chairs a year at an average price per chair of $173. The carrying cost per unit is $19.97. The company orders 500 chairs at a time and has a fixed order cost of $41 per order. The chairs are sold out before they are restocked. What is the economic order quantity?

Reference no: EM131304731

Questions Cloud

Calculate the gross profit margin and profit margin : An alphabetical list of Rikards Company's adjusted accounts at its fiscal year end, August 31,2014, follows. All accounts have normal balances. Calculate the gross profit margin and profit margin

Certain service can be performed satisfactorily by process : Uncle Wilbur’s trout ranch is now for sale for $30,000. Annual property taxes, maintenance, supplies, and so on are estimated to continue to be $3,000 per year. A certain service can be performed satisfactorily by process R, which has a capital inves..

The economic order quantity model : ABC Company sells 2,234 chairs a year at an average price per chair of $199. The carrying cost per unit is $24.78. The company orders 368 chairs at a time and has a fixed order cost of $131 per order. The chairs are sold out before they are restocked..

What would be the total return of bond in dollars : A 8.7 percent coupon bond with 19 years left to maturity is priced to offer a 6.85 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.5 percent. What would be the total return of the bond in dollars? What would b..

What is the economic order quantity and shortage costs : ABC Company sells 3,807 chairs a year at an average price per chair of $180. The carrying cost per unit is $20.38. The company orders 230 chairs at a time and has a fixed order cost of $97.3 per order. The chairs are sold out before they are restocke..

What is the dividends per share figure : Papa Roach Exterminators, Inc., has sales of $699,000, costs of $295,000, depreciation expense of $37,000, interest expense of $29,000, and a tax rate of 30 percent. The firm paid out $114,000 in cash dividends, and has 35,000 shares of common stock ..

The yield to maturity on a? comparable-risk bond : (Yield to maturity) The market price is $1,075 for a 9-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity? What is the ..

Goals of the firm versus the personal goals of managers : Agency conflicts arise when there are differences in the goals of the firm versus the personal goals of managers. What qualitative considerations are important for the mitigation of agency conflicts in relation to the acceptance and completion of cap..

What is your estimate of an appropriate stock price : TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $2.6 million and there are 142,000 shares outstanding. If the benchmark price–sales ratio is 6.2, what is your estimate of an appropriate stock price?

User Account

All Pages