Answer: $2,555
Explanation:
Bond discount amortization = Interest cost - Coupon payment
Coupon payment = Stated interest * Par value
= 12% * 1,000,000 * 6/12 months
= $60,000
Interest cost = Issue price * effective interest
= 893,640 * 14% * 6/12
= $62,554.80
Amortized amount:
= 62,554.80 - 60,000
= $2,554.80
= $2,555
A bond has a coupon rate of 8% and matures in 10 years. What are its expected cash flows if this bonds have a principal amount of $1000 and pay interest semi-annually
Answer:
$1080
Explanation:
Calculation to determine the expected cash flows
Since the bonds have a principal amount of the amount of $1000 first step is to calculate the Cash flow CO1
CO1=$1000(.08)/2
CO1=$80/2
CO1= $40
Second step is to calculate the Frequency of PMT
Frequency of PMT= 10 years x 2 (semi-anually)
Frequency of PMT= 20
Now let determine the Cash Flow CO10
Cash Flow CO10=1000+80
Cash Flow CO10=$1080
Therefore the expected cash flows is $1080
The papilla supplies nourishment to the
Answer:
Papilla: Cells filled with capillaries that supply nourishment to the cells around it.
Adidas is using 3D printed shoes which will be custom made at first and then mass manufactured, as unit costs fall. Three-dimensional printing is expected to dramatically reduce businesses' carbon footprints because the technology _______.
Answer:
c. nearly eliminates transportation of finished goods to distribution centers and retailers
Explanation:
3D printing is a form of additive manufacturing that should help in carbon footprint that are related with the transport sector as the transportation and the storage should be decreased via the technology,
The shoes should be generated on demand basis that depend upon the 3d printing technology so it removed the finished goods transportation to the distribution centers & the retailers
Therefore the correct option is c.
Gutierrez Company is constructing a building. Construction began in 2014 and the building was completed on December 31, 2014. Gutierrez made payments to the construction company of $2,500,000 on 7/1/14, $5,500,000 on 9/1/14, and $5,000,000 on 12/31/14. What is the amount of weighted average accumulated expenditures
Answer:
$3,083,333.33
Explanation:
Weighted average accumulated expenditures = ($2,500,000*6/12) + ($5,500,000*4/12)
Weighted average accumulated expenditures = $1,250,000 + $1,833,333.33
Weighted average accumulated expenditures = $3,083,333.33
So, the amount of weighted average accumulated expenditures is $3,083,333.33.
The Weber Company purchased a mining site for $527,108 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 82,993 tons will be recovered. During the first year the company extracted 5,802 tons of ore. The depletion expense is
Answer:
$36,849.86
Explanation:
Depletion cost is used to allocate the costs of extracting natural resources.
Depletion expense = (depreciable cost / total tons that can be recovered ) x tons recovered in a given year
(527,108 / 82,993) x 5802 = $36,849.86
Consider the baggage check-in process of a small airline. Check-in data indicates that from 9am to 10am, 190 passengers checked in. Moreover, based on counting the number of passengers waiting in line, airport management found that the average number of passengers waiting for check-in was 56.
Required:
How long did the average passenger have to wait in line?
Answer:
17.68 minutes
Explanation:i
In order to calculate the average time passenger had to wait in line, we would first divide the average number of passengers check-in in with the passengers checked in from 9 am to 10 am (which was the highest number of check-ins of the day). Then we would multiply that number by 60 minutes. As shown below:
First,
= 56 average number of passengers checked-in / 190 passengers checked-in from 9 to 10 am
= 0.2947
Then
= 0.2947 x 60 minutes
= 17.68 minutes
Hence, 17.68 minutes did the average passenger wait in line.
In Washburn's factory, what is the break-even point for the new line of guitars if the retail price is (a) $349, (b) $389, and (c) $309? Also, (d) if Washburn achieves the sales target of 2,000 units at the $349 retail price, what will its profit be?
Answer:
a. 186 units
b. 156 units
c. 232 units
d. $370,000
Explanation:
a. Calculation to determine the break-even point for the new line of guitars if the retail price is $349
Using this formula
Break-even point quantity = Fixed cost / Unit price – Unit variable cost
Let plug in the formula
Break-even point quantity = ($14,000 + $4,000 + $20,000) / $349 – ($25 + $120)
Break-even point quantity= $38,000 / $349 - $145
Break-even point quantity= $38,000 / $204
Break-even point quantity= 186.27
Break-even point quantity= 186 units
Therefore the break-even point for the new line of guitars if the retail price is $349 will be 186 units
b. Calculation to determine the break-even point for the new line of guitars if the retail price is $389
Break-even point quantity = ($14,000 + $4,000 + $20,000) / $389 – ($25 + $120)
Break-even point quantity= $38,000 / $389 - $145
Break-even point quantity= $38,000 / $244= 155.74
Break-even point quantity = 156 units (Approximately)
Therefore Therefore the break-even point for the new line of guitars if the retail price is $389 will be 156 units
c. Calculation to determine the break-even point for the new line of guitars if the retail price is $309
Break-even point quantity=($14,000+$4,000+$20,000)/$309 – ($25 + $120)
Break-even point quantity= $38,000 / $309 - $145
Break-even point quantity= $38,000 / $164
Break-even point quantity= 231.71
Break-even point quantity = 232 units (Approximately)
Therefore the break-even point for the new line of guitars if the retail price is $309 will be 232 units
d. Calculation to determine what will its profit be
if Washburn achieves the sales target of 2,000 units at the $349 retail price
Using this formula
Profit = Total revenue – Total cost
Profit= (P x Q) – [FC + (UVC x Q)]
Let plug in the formula
Profit= ($349 x 2000) – [$38,000 + ($145 x 2,000)]
Profit= $698,000 – $328,000
Profit= $370,000
Therefore the profit will be $370,000
Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs:
Setting up equipment $3,000
Machining $15,000
The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Excellent Laptops Outstanding Computers
Direct Labor $25,000 $10,000
Direct Materials $20,000 $5,000
Expected Production in Units 3,000 3,000
Machine Hours 850 2,000
Setup Hours 80 75
Calculate Outstanding Computer's consumption ratio for setup hours. (Note: Round your answer to two decimal places.)
a. 0.25
b. 0.48
c. 0.75
d. 0.45
e. 0.90
Answer:
Alpha Technology
Outstanding Computer's consumption ratio for setup hours is:
b. 0.48
Explanation:
a) Data and Calculations:
Overhead activities and costs:
Setting up equipment $3,000
Machining $15,000
Excellent Outstanding
Laptops Computers
Direct Labor $25,000 $10,000
Direct Materials $20,000 $5,000
Expected Production in Units 3,000 3,000
Machine Hours 850 2,000
Setup Hours 80 75
Total setup hours = 155 hours
Outstanding Computer's consumption ratio for setup hours = 75/155 * 100
= 48%
Jebali Company reports gross income of $340,000 and other property-related expenses of $229,000 and uses a depletion rate of 14%. Calculate Jebali's depletion allowance for the current year. $fill in the blank 1
Answer:
15,540
Explanation:
Depletion = depletion rate x (gross income - expenses)
0.14 x ($340,000 - $229,000) = 15,540
Yard Tools manufactures lawnmowers, weed-trimmers, and chainsaws. Its sales mix and unit contribution margin are as follows.
Sales Mix Unit Contribution Margin
Lawnmowers 20% $33
Weed-trimmers 50% $21
Chainsaws 30% $37
Yard Tools has fixed costs of $4,200,000.
Required:
Compute the number of units of each product that Yard Tools must sell in order to break even under this product mix.
Answer:
Lawnmowers’ break-even point in units = 29,787 units
Weed-trimmers’ break-even point in units = 74,468 units
Chainsaws' break-even point in units = 44,681 unit
Explanation:
Given:
Sales Mix Unit Contribution Margin
Lawnmowers 20% $33
Weed-trimmers 50% $21
Chainsaws 30% $37
The number of units of each product that Yard Tools must sell in order to break even under this product mix can be computed using Weighted-Average Contribution Margin Ratio as follows:
Weighted contribution margin = (Sales Mix of Lawnmowers * Unit Contribution Margin of Lawnmowers) + (Sales Mix of Weed-trimmers * Unit Contribution Margin of Weed-trimmers) + (Sales Mix of Chainsaws * Unit Contribution Margin of Chainsaws) = (20% * $33) + (50% * $21) + (30% * $37) = $28.20
Total break-even point in units for the company = Fixed cost / Weighted contribution margin = $4,200,000 / $28.20 = 148,936 units
Therefore, we have:
Lawnmowers’ break-even point in units = Sales Mix of Lawnmowers * Total break-even point in units for the company = 20% * 148,936 = 29,787 units
Weed-trimmers’ break-even point in units = Sales Mix of Weed-trimmers * Total break-even point in units for the company = 50% * 148,936 = 74,468 units
Chainsaw’s break-even point in units = Sales Mix of Chainsaws * Total break-even point in units for the company = 30% * 148,936 = 44,681 units
A code of ethics for IT auditors and organizations primarily helps to set clear ___________. IT guidelines financial guidelines career goals expectations
Answer: IT guidelines
Explanation:
In the IT audit process, a computer system is checked to see if it not only performs the duties for which it was set up, but also if it protects the assets of the company and maintains data integrity.
A code of ethics for such a process would therefore be one that helps set clear IT guidelines to ensure that the computer system does what it is supposed to do and protects the company's assets as well.
Your grandfather has offered you a choice of one of the three following alternatives: $11,500 now; $5,700 a year for five years; or $71,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
Required:
a. Assuming you could earn 9 percent annually, compute the present value of each alternative.
b. Which alternative should you choose?
Answer:
1. $11,500
2. $22,171.01
3. $46,145.13
option 3. This is because it has the highest present value
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
option 2
Cash flow each year from year 1 to 5 = $5,700
I = 9
PV = 22,171,01
OPTION 3
Cash flow in year 5 = 71,000
I = 9
PV = 46,145.13
To determine PV using a financial calculator take the following steps:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Judd, Inc., owns 35% of Cosby Corporation. During the calendar year 2010, Cosby had net earnings of $300,000 and paid dividends of $30,000. Judd mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the investment account, net income, and retained earnings, respectively?
a. Understate, overstate, overstate
b. Overstate, understate, understate
c. Overstate, overstate, overstate
d. Understate, understate, understate
Answer: d. Understate, understate, understate
Explanation:
If using fair value, the effects of net earnings and dividends would not be accounted for. With the equity method however, this would have done leading to the investment account, net income, and retained earnings being understated if using fair value as opposed to equity.
The Equity method would have sent 35% of the net earnings to the investment account which would have increased it. 35% of the Cosby dividends would have been sent to the net income which would have increased it as well and when net income increases, so does retained earnings.
Automatic stabilizers are fiscal policy measures that A. do not require new legislation. B. are determined by the Federal Reserve System. C. are part of discretionary fiscal policy. D. must be determined by the Congress in each budget.
Answer: A. do not require new legislation.
Explanation:
Fiscal policy refers to measures used by the governments to stabilize the economy. Automatic stabilizers are part of this policy and as the term implies, they are automatic. They kick in when the economy is overheated to cool it down or when there is a recession to boost it.
They therefore require no new legislation because they have already taken effect. Automatic stabilizers are useful because they are not affected by the time lag it takes between the time new fiscal policy is announced and the time it actually take effect.
A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced.
Product Pounds Price per Pound
Feed 100,000 $ 0.70
Flour 50,000 2.20
Starch 20,000 1.00
How much of the $120,000 cost should be allocated to flour if the value basis is used?
a) $24,500.
b) $84,000.
c) $66,000.
d) $70,000.
e) $200,000.
Answer:
c) $66,000.
Explanation:
The computation is shown below:
The value allocated is as follows:
Feed (100,000 × 0.7)=70,000
Flour (50,000 × 2.2)=110,000
Starch (20,000 × 1)=20,000
Total 200,000
Now allocation to the flour is
= (110,000 ÷ 200,000 × 120,000)
= $66,000
hence, the option c is correct
Freddie's Food Service uses QuickBooks Desktop. They do not track or sell inventory. They have regular customers that they want to invoice automatically on a weekly basis. They would like to review a Sales by Customer by Month report regularly. The company currently pays their vendors in QuickBooks Desktop using the online bill pay service, QuickBooks Bill Pay. After converting to QuickBooks Online, which 3 setup and customization steps are appropriate for this client? Customize reports Turn off multicurrency Rebuild data Review recurring transactions Set up initial quantity on hand and cost for each product Set up and implement an online bill pay service
Answer:
Customize reports
Review recurring transactions
Set up and implement an online bill pay service
Explanation:
Considering the situation described above, after converting to QuickBooks Online, the 3 setup and customization steps that are appropriate for this client are the following:
1. Customize reports: this includes forms and reports and, if possible to memorize reports.
2. Review recurring transactions: this is to restore desktop QuickBooks memorized transactions.
3. Set up and implement an online bill pay service: this is done either through Intuit Online Payroll or QBOP.
On January 1, 2021, Princess Corporation leased equipment to King Company. The lease term is 11 years. The first payment of $700,000 was made on January 1, 2021. The equipment cost Princess Corporation $4,641,167. The present value of the lease payments is $5,001,197. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 10%, how much interest revenue will Princess record in 2022 on this lease
Answer: $403,221.67
Explanation:
Interest revenue in 2022 = Value of Lease payments in 2022 * Interest rate
Value of lease payments after first payment :
= 5,001,197 - 700,000
= $4,301,197
Value of lease payments after second payment in 2022:
= Value of lease payment after first payment + Interest revenue - lease payment
= 4,310,197 + (4,310,197 * 10%) - 700,000
= $4,032,216.70
Interest revenue in 2022 = 4,032,216.70 * 10%
= $403,221.67
Your aunt has promised to give you $5,000 when you graduate from college. You expect to graduate three years from now. If you speed up your plans to enable you to graduate two years from now, the present value of the promised gift will: Multiple Choice be less than $5,000. remain constant. decrease. Incorrect equal $5,000. increase
Answer:
The present value of the promised gift will:
be less than $5,000.
Explanation:
The present value of $5,000 to be received in three years' time from today is less than $5,000 received. This is explained by the time value of money concept. If the $5,000 gift is discounted to today's value, using a discount factor of 0.751 (10% in three years' time), it would be $3,755 ($5,000 * 0.751). This means that $5,000 received in year 3 is less than $5,000 received today.
The present value of the promised gift will be less than $5,000 If a person speeds up his/her plans to enable to graduate two years from now, by applying the concept of the time value of money.
What is the time value of money?The time value of money is a fundamental concept of finance. This concept maintains that money or cash in the present is worth more than the identical sum of money to be accepted in the future.
In the above case, The present value of $5,000 to be received in the period of three years from today would be less than $5,000 received.
In the above case, the concept of the time value of money is applied. It means that if the $5,000 gift is discounted to today's value, using a discount factor of 0.751 (10% in three years' time), it would be:
[tex]=\$5,000 \times 0.751\\= \$3,755[/tex]
This means that $5,000 received in year 3 is less than $5,000 received today.
Therefore, option A is correct.
To learn more about the time value, refer to:
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Articles of the code of ethics are broad statements of ethical principles and the standards of practice support, interpret and amplify the respective articles
Answer: True
Explanation:
The Code of Ethics is the detailed document where the professional responsibilities of every professional is written. It should be noted that the Code of Ethics is made up of seventeen Articles and their related Standards of Practice.
The Articles of the code of ethics are broad statements of ethical principles while the standards of practice support, interpret and amplify the respective articles. Therefore, the Statement is true.
The statement given in the query holds true and the code of ethics are a set code of instructions that are to be followed by the business professionals in the manner as prescribed.
The code of ethics are a set manner of instructions that are like a law book to be followed by the different kinds of businessmen and professionals of their field.
Code of ethics are given by the respective authoritative institutes of which such businessmen or professionals are the members. it implies the way in which the practice can be done.Code of ethics contain respective articles for communication, outfit and attire, verbal and written communication and all such other fields which contribute to the maintained decency in the professional conduct.They are generally different for professionals of different streams. Like they are different for superiors and subordinates of the same organization as well given their subjective roles.Hence, the statement given about the code of ethics above holds true that they must be followed and acted accordingly and implied at each stage of practice.
To know more about code of ethics, click the link below.
https://brainly.com/question/3010649
Sofia bought a couch that required a $60 down payment and $60 per month for the next eight months. Which type of liability does this describe?
a) a long term liability
b) a non liquid liability
c) a consumer liability
d) a current liability
Assuming Sofia bought a couch that required a $60 down payment. This liability describe:d) a current liability.
What is current liability?Current liability can be defined as the amount owe or debt amount a person is expected to pay back within a stipulated period of time.
Since Sonia is expected to pay $60 per month for eight months which means that Sonia has a debt to pay within a year.
Therefore this liability describe:d) a current liability.
Learn more about current liability here:https://brainly.com/question/24130118
Inflation imposes many costs on the economy: shoe-leather costs, money illusion, menu costs, wealth redistribution, price confusion, future price level uncertainty, and tax distortions.
a. True
b. False
Answer: True
Explanation:
Inflation refers to the decline in the purchasing power of a currency over time. Inflation creates shoe leather cost which refers to the cost of time and.the effort by which individuals spend so as to mitigate the effects of inflation, like holding fewer cash.
Also, inflation creates money illusion as there's reduction in the value of money that one holds. Inflation creates menu costs as prices goes up. It also brings about wealth redistribution, price confusion, future price level uncertainty, and tax distortions.
Therefore, the correct option is True.
Suppose that in the rice market demand shifts due to a new rice diet that is being marketed in the U.S. as a cure for cancer. Simultaneously the supply curve shifts due to a flood that affects the rice crop in California. What is the most likely outcome in this situation
Answer:
The equilibrium price will increase
Explanation:
Equilibrium price is defined as the price at which the quantity demanded and quantity supplied are equal.
At this point there is no excess demand or supply, they are both equal.
I'm the given scenario the new rice diet that is being marketed in the U.S. as a cure for cancer will lead to increase in demand for rice.
While a flood that affects the rice crop in California will reduce the ability of suppliers to supply. Leading to reduced quantities supplied to the market.
This results in increased prices for the now scarce rice in the economy
It is illustrated in the attached diagram where price increases from P1 to P2.
The new equilibrium quantity is Q1
Ivo Company has a $10 million face value bond issue outstanding. These bonds include a call option that permits Ivo to redeem the bonds at any time for 101% of par. These bonds were issued at a premium and have a carrying value of $10,200,000. If Ivo calls the bonds, its income statement will reflect:_---.
a. neither a gain nor a loss on redemption.
b. a gain on redemption.
c. a loss on redemption.
Answer:
b. a gain on redemption.
Explanation:
Given that
The face value of the bond is $10 million
The bond should be redeemed at 101% of par
Also it is issued for a premium and its carrying value is $10,200,000
Since the carrying value is more than the face value that means the income statement represent the gain on redemption of the bonds
Therefore the option b is correct
When computer users have trouble with their machines or software, Roland is the first person they call for help. Roland helps users with their problems, or refers them to a more-experienced IT employee. Roland holds the position of __________ in the organization.
Question Completion with Options:
Support Analyst
Systems Analyst
Database Administrator
Network Administrator
Answer:
Support Analyst
Explanation:
Since Roland provides primary technical support to end-users, sorting out hardware and software problems for them, he is an IT Support Analyst. Roland should also respond to, document, and resolve service calls with the hardware or software. Some support analysts specialize in specific areas of the IT department, for example, applications. Others provide general technical support to computer end-users.
A building is acquired on January 1, at a cost of $830,000 with an estimated useful life of eight years and salvage value of $75,000. Compute depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.)
Answer:
$207,500
$155,625
$116,719
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2/8 = 1/4
1 = $830,000 / 4 = 207,500
book value $830,000 - 207,500 = 622,500
2 = 622,500 / 4 = 155,625
book value = 622,500 - 155,625 = 466875
3 466875 / 4 = 116,718.75 = 116,719
ai là người giàu nhất thế giới
Answer:
Jeff Bezos
Explanation:
Jeff Bezos là người sáng lập Amazon và có giá trị tài sản ròng là 205 tỷ USD
Đây là danh sách các nhà vận chuyển tiền được xếp hạng:
https://www.forbes.com/real-time-billionaire/#114ff8bb3d78
Jeff Bezos is the founder of Amazon and has a net worth of $205 billion Here's a list of billionaire's ranked:
https://www.forbes.com/real-time-billionaires/#114ff8bb3d78
The demand and supply functions for basic cable TV in the local market are given as: Calculate the consumer and producer surplus in this market. If the government implements a price ceiling of $15 on the price of basic cable service, calculate the new levels of consumer and producer surplus. Are all consumers better off
Answer: Hello your question is poorly written attached below is the complete question
answer:
a) Cs = 800,000 , Ps = 1,500,000
b) Cs = 1437500, Ps = 525,000
Explanation:
Demand function ( Qd ) = 200,000 - 4000 P
supply function ( Qs ) = 20,000 + 2000 P
at equilibrium : 200,000 - 4000P = 20,000 + 2000P
therefore ; P = 180,000 / 6000 = 30
Q = 20,000 + 2000 ( 30 ) = 80,000
a) Determine consumer and producer surplus in the market
consumer surplus ( Cs ) This is the area above the price and below the demand curve = 1/2 * ( 50 - 30 ) 80,000 = 800,000
producer surplus ( Ps ) This is the area above supply and below price
= 30 * ( 80,000 ) - 1/2 (80,000 - 20,000 ) (30)
= 1,500,000
b) Determine the new levels of consumer and producer surplus with a price ceiling of $15
Pc (ceiling price ) = $15
Qd = 200,000 - 4000 ( 15 ) = 140,000
Qs = 20,000 + 2000 ( 15 ) = 50,000
∴ New consumer surplus = area ( a , Pc, b, d )
= ( 30 - 15 ) (50,000) + 1/2(50-30) (80,000) - 1/2 (80,000 - 50,000 ) (37.5 - 30)
= 1437500
New producer surplus = area ( Pc , b, e 0 )
= ( 15 ) ( 50000) - 1/2 ( 50,000 - 20,000 ) (15)
= 525,000
Jennifer is the sole beneficiary of an irrevocable trust created by her father. Income and principal may be distributed to her at the trustee's discretion. Jennifer has a 5-and-5 power of appointment over the trust. Jennifer died last month at which time the trust was valued at $2,500,000. She did not withdraw any money from the trust this year. How much of the trust was included in her estate at death
Answer:
$125,000
Explanation:
Calculation to determine How much of the trust was included in her estate at death
Since she has 5-and-5 power of appointment over the trust which means that she has the ability to withdraw the GREATER of 5% of fair market value (fmv) of the trust or the amount of $5,000.
Hence, the amount that was included in her estate at death will be $125,000 which is calculated as (5%*trust valued amount of $2,500,000)
Therefore How much of the trust was included in her estate at death is $125,000
10 years with a stated interest rate of 11% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 12%. Using present value tables, calculate the issue price of the bonds
Answer:= $471,325
Explanation:
Price of a bond = Present value of coupon payments + Present value of face value at maturity
Coupon payments = 500,000 * 11% * 1/2 years = $27,500
Periodic yield = 12%/ 2 = 6% per semi annual period
Periods = 10 * 2 = 20 semi annual periods
Coupon payment is constant so it is an annuity.
Price of bond = Present value of annuity + Present value of face value at maturity
= (Annuity * Present value interest factor of Annuity, 6%, 20 years) + Face value / (1 + rate) ^ number of periods
= (27,500 * 11.4699) + 500,000 / (1 + 6%)²⁰
= $471,325
A large bakery buys flour in 25-pound bags. The bakery uses an average of 4200 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10.70 per order. Annual carrying costs are $76 per bag. Determine the EOQ. (Keep two decimal places in your answer)
Answer:
34
Explanation:
Annual demand D = 4,200 bags
Ordering cost S = $10.70
Holding cost H = $76
Economic order quantity = [tex]\sqrt{2*D*S / H[/tex]
Economic order quantity = [tex]\sqrt{2*4200*$10.70 / $76}[/tex]
Economic order quantity = [tex]\sqrt{89880/76}[/tex]
Economic order quantity = [tex]\sqrt{1182.63}[/tex]
Economic order quantity = 34.389388
Economic order quantity = 34
