Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

All is one question Cullumber Aviation uses specialty gaskets in the production of a small aeroplane, X.224. During a year, Cullumber uses 19,600 gaskets with

image text in transcribed

All is one question

Cullumber Aviation uses specialty gaskets in the production of a small aeroplane, X.224. During a year, Cullumber uses 19,600 gaskets with an average usage of 35 gaskets per day of production. The gaskets cost $45 each. Because the gaskets require some special handling, the carrying costs are $5.00 per gasket. The ordering costs are $10 per order. Currently, Cullumber Aviation is placing orders for 1,120 gaskets. However, some of these gaskets are being damaged due to limited availability of the needed special storage. Elastomers, Inc. is the supplier of the specialty gaskets and can usually fill an order in 2 days. Occasionally, Elastomers is backlogged, but they never take more than 3 days to fill an order. If Cullumber runs out of gaskets, production will stop. (a) Calculate the total ordering cost and carrying cost for the current order size. (Round answers to 2 decimal places, eg. 125.74.) Ordering cost $ Carrying cost $ Total Cost $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) Calculate the economic order quantity. Comment on whether this order quantity will help alleviate Cullumber Aviation's inventory storage concerns. Economic order quantity gaskets Economic order help alleviate Cullumber Aviation's invent storage concerns. e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) Calculate the appropriate re-order point. Discuss any potential problems with the timing of this re-order point. Re-order point gaskets e Textbook and Media Save for Later Attempts: 0 of 3 used Submit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

13th Edition

8120335643, 136126634, 978-0136126638

More Books

Students also viewed these Accounting questions

Question

What do informed sources have to say about this topic?

Answered: 1 week ago