Acc 3333 Ch 20 In Class solns 2010

Acc 3333 Ch 20 In Class solns 2010 - Chapter 20 In-Class...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 20 In-Class Solutions 20-19 (20 min.) EOQ for manufacturer. 1. Relevant carrying costs per part per year: Required annual return on investment 15% × $60 = $ 9 Relevant insurance, materials handling, breakage, etc. costs per year 6 Relevant carrying costs per part per year $15 With D = 18,000; P = $150; C = $15, EOQ for manufacturer is: = 2 18,000 $150 $15 × × = 600 units 2. Total relevant ordering costs = × P Q D = × $150 600 000 , 18 = $4,500 where Q = 600 units, the EOQ. 3. At the EOQ, total relevant ordering costs and total relevant carrying costs will be exactly equal. Therefore, total relevant carrying costs at the EOQ = $4,500 (from requirement 2). We can also confirm this with direct calculation: costs carrying relevant Total = × C 2 Q = × $15 2 600 = $4,500 where Q = 600 units, the EOQ. 4. Purchase order lead time is half a month. Monthly demand is 18,000 units ÷ 12 months = 1,500 units per month. Demand in half a month is × 1,500 units or 750 units. Lakeland should reorder when the inventory of rotor blades falls to 750 units. 20-21 (20 min.) Economic order quantity for retailer, ordering and carrying costs. 1. D = 24,000, P = $144, C = $12 EOQ = 2(24,000) ($144) $12 = 758.9 2245 759 modems 2. TRC = DP QC     Q 2 + = 24,000 $144 759 12     759 2 × × + = $4,553 + $4,554 = $ 9,107
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. Reorder point = Number of units Purchase-order sold per     lead time units of time × = 24,000 360 × 5 = 333.3 2245 333 modems 20-23 (20 min.) JIT production, relevant benefits, relevant costs. 1. Solution Exhibit 20-23 presents the annual net benefit of $315,000 to Champion Hardware Company of implementing a JIT production system. 2. Other nonfinancial and qualitative factors that Champion should consider in deciding whether it should implement a JIT system include: a. The possibility of developing and implementing a detailed system for integrating the sequential operations of the manufacturing process. Direct materials must arrive when needed for each subassembly so that the production process functions smoothly. b.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/14/2011 for the course ACCT 3333 taught by Professor J.d during the Spring '08 term at Saint Mary's University Texas.

Page1 / 7

Acc 3333 Ch 20 In Class solns 2010 - Chapter 20 In-Class...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online