a) Calculate the current annual total inventory costs b) Calculate the economic order quantity c) Calculate the annual total inventory costs if EOQ is used
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Jason owns a fish shop where he sells an exotic variety of tuna fish which he imports from Japan.
Jason refrigerates the fish in a cold storage facility near his shop that charges him a fixed annual fee of $1000 and variable charge of $5 per day for each fish container that is stored.
Every morning, Jason brings fish from the cold storage to his shop for sale. Jason estimates that he incurs $10,000 electricity cost each year on refrigerating the fish inside his own shop.
Jason incurs the following ordering costs:
Delivery charges of $10,000 per delivery
Import duties of $300 per carton
Custom fees of $200 per order
Import license fee of $150 per annum
Jason currently imports fish by placing one order of 20 cartons every month. Each carton costs $2,000.
Jason is wondering if he can save inventory costs by adopting EOQ model.
a) Calculate the current annual total inventory costs
b) Calculate the economic order quantity
c) Calculate the annual total inventory costs if EOQ is used
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- Natalia makes colorful beaded necklaces and sells them at a local farmer's market. Natalia currently sells her necklaces for $40 each. She spends approximately $18 on the materials (beads, wire, and clasp) and $2 on packaging for each necklace. She pays annual fixed costs of $4,180 ($3,500 for space at the farmer's market, $180 for licenses and permits, and $500 annual depreciation on tent, display cases, and signage). a) How many necklaces does Natalia need to sell in 2021 to break even? necklaces b) How many necklaces does Natalia need to sell in 2021 to earn a profit of $25,000? necklaces c) Natalia's best guess is that she will sell 1,500 necklaces in 2021. If she's correct, what is Natalia's expected 2021 profit? d) Natalia estimates that if she reduces her selling price by 15% in 2021, she will sell 20% more necklaces. What is Natalia's expected profit if she reduces her selling price by 15%? Natalia estimates that if she instead increases her selling price by 15% in 2021, she…1.Link wants to make $100,000 after tax on his new venture into selling pizza-on-a-stick, using a "push along" cart at the beach. For each pizza-on-a-stick, he incurs raw material costs of $5 and sells them for $10. He pays a salary to his friend Zelda, who operates the cart for $50,000. If he buys the cart himself, he will incur fixed expenses of $20,000. Or, he can rent the cart and pay $1 to the cart supplier each time he sells a pizza stick. What is his point of indifference? That is, at what volume of pizza sticks is he indifferent about renting or buying the cart? (Insert a number ONLY) 2. Like Link, Chrom sells pizza-on-a-stick at the beach. But Chrom also sells dogs-in-a-pocket, which are hot dogs you can carry with you that have enough preservatives to survive in your pocket for years. For each pizza-on-a-stick, Chrom incurs raw material costs of $5 and sells them for $10. He incurs material costs of $3 for the dogs and sells them for $5. He sells 3 times as many dogs as he…Mr. Juan is a retired government employee who is good at baking. One day he decides to put up a bakery shop in your barangay. He renovates a portion of his house to serve as the area for the production of bread. He purchases baking equipment and raw materials to produce five different types of bread. Mr. Juan also hires Jose to help him with the baking and, at the same time, to be in-charge of sales. Mr. Juan pays Jose on a weekly basis. Every day, Mr. Juan's wife deposits the daily cash sales in their bank account at XY Savings Bank. With the help of accounting, what possible decisions or questions of Mr. Juan can accounting provide an answer to?
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