Question
Could you olz help to solve this sum Friendly Home Services expects sales of baskets to be $125,000 this year, an ordering cost of $75.00
Could you olz help to solve this sum Friendly Home Services expects sales of baskets to be $125,000 this year, an ordering cost of $75.00 per order, and carrying costs of $3.00 per basket. The price of a basket is $25.
a.What is the economic ordering quantity?
b.How many orders will be placed during the year?
c.What will the average inventory be?
d.What is the total cost of ordering and carrying inventory
2 Xxxprofit is declining because of the industry's slowdown. To enhance profitability and to preserve cash, Xxxis considering shortening its credit period and eliminating its cash discount. Terms are currently 2/10 , net 50 and would be changed to net 30. Currently, 60 percent of customers, on average, pay at the end of the credit period (50 daysthe other percent pay, on average, 10 days and receive the discount. It is anticipated that under the new policy customers will pay, on average, in 20 days. At present, average monthly sales are $600,000, but they are expected to fall to $550,000 with the tightening of credit. Variable production costs are 69 percent, and bank financing is currently floating at 9 percentBad debt losses at percent of sales are expected to drop to 1.0 percent of sales
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