Chapter 2 - Solutions

Chapter 2 - Solutions - ACC 377 SUMMER 2010 CHAPTER 2...

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ACC 377 SUMMER 2010 CHAPTER 2 HOMEWORK SOLUTIONS Exercises 2. a. EOQ = 2CN C= cost of order K N= number of units required annually K = carrying cost per unit = 2($72)(360,000 units) 4 = 51,840,000 4 = 12,960,000 EOQ = 3,600 units b. Carrying cost = Average inventory x Carrying cost per unit Carrying cost = $4 x 3,600 units/2 = $7,200 Number of orders = Units required / EOQ = 360,000 / 3,600 = 100 orders Ordering cost = $72/order x 100 orders = $7,200 Total Cost $14,400
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4. DM (WIP) IM (FOH) Req #110 20,000 Req #111 18,000 Req #112 16,000 Req #113 1,800 Req #114 3,000 Req #115 9,000 Req #116 2,000 Req #117 1,300 Req #118 1,700 68,000 4,800 <date> Work in Process 68,000 Factory Overhead 4,800 Materials Inventory 72,800 To record materials requsitions
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5. a. <date> Materials Inventory 200,000 Accounts Payable 200,000 To record materials purchases b. <date> WIP Inventory 175,000 Materials Inventory 175,000 To record materials requisitions - direct materials c. <date> Factory Overhead 12,000 Materials Inventory 12,000 To record materials requisitions - indirect materials d. <date> Materials Inventory 2,500 WIP Inventory 2,500 To record materials returned to storeroom e.
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