What is the increase in their EOQ if all of the model parameters (except the number of days in a year) double?
Kushie's Coffee in Bangalore is a quaint establishment nestled near MG Road in the central business district. It serves coffee and fruit cake to a clientele that has been enjoying these products for over fifty years. The demand for coffee beans is 6600 cases per year (each case has 24 ten-pound bags). It would be disastrous for them to run out of coffee, so they keep a safety stock of 30 cases. The cases cost $4800 and it costs $5 per case to order coffee. As coffee is a perishable product, the holding cost is fairly high at $40/case/year. The lead time to receive an order is seven days. Kushie's is open 300 days a year.
A) 100%
B) 33%
C) 41%
D) 50%
Answer: C
You might also like to view...
The ending inventory balance represents
a. The cost of goods sold during the current period and is reported on the balance sheet as an asset. b. Unexpired costs and is reported on the balance sheet as an asset. c. Expired costs and is reported on the income statement as an expense d. Expired costs and is reported on the balance sheet as an asset.
Nonverbal communication signals do not apply to written messages
Indicate whether the statement is true or false
Beta Inc. can produce a unit of Zed for the following costs: Direct material$10 Direct labor 20 Overhead 50 Total costs per unit$80 An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit. If Beta buys from the supplier, it will still incur 40% of its overhead. Beta should:
A. Buy Zed since the relevant cost to make it is $60. B. Make Zed since the relevant cost to make it is $60. C. Buy Zed since the relevant cost to make it is $30. D. Buy Zed since the relevant cost to make it is $80. E. Make Zed since the relevant cost to make it is $30.
Which of the following would NOT be included in a firm's total variable cost?
A. expenses for parts B. sales commissions C. depreciation on buildings D. packaging materials E. outgoing freight