Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lakeland Company produces lawn mowers and purchases 2,800 units of a rotor blade part each quater at a cost of $60 per unit. In

Lakeland Company produces lawn mowers and purchases 2,800 units of a rotor blade part each quater at a cost of $60 per unit. In addition, the holding cost is $10 per unit per year. The relevant ordering cost per purchase order is $250. Required A, Calculate Lakeland's EOQ for the rotor blade part. (5 marks) B, Calculate Lakeland's annual relevant ordering costs for the EOQ calculated in requirement 1. (5 marks) C, Calculate Lakeland's annual relevant holding costs for the EOQ calculated in requirement 1 (5 marks) D, Assume that demand is uniform throughout the year and known with certainty so that there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Lakeland's reorder level for the rotor blade part. (5 marks) E, Supplier offer discount 15% if the entity purchases from 5,000 units per order. i, In financial term, whether the entity accept the offer of supplier? (Compare total inventory cost include purchase cost, holding cost and ordering cost) (10 marks) ii, List and explain 3 other factors that the entity should consider before accepting offer of the supplier? (5 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Calculation snip Formula Snip E Calculation for total cost Calculation snip Formula Snip Answer from ... 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: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ

6th Canadian edition

978-0132893534, 9780133389401, 132893533, 133389405, 978-0133392883

More Books

Students also viewed these Accounting questions

Question

Vlans improved security and reduce cost True False

Answered: 1 week ago

Question

Distinguish between prejudice and discrimination.

Answered: 1 week ago