Answered step by step
Verified Expert Solution
Question
1 Approved Answer
L&L Ltd. is a robot pet manufacturer who produces more than 20 different models in order to meet the diverse customer demands. Due to the
L&L Ltd. is a robot pet manufacturer who produces more than 20 different models in order to meet the diverse customer demands. Due to the long lead time, each year the company can place only two orders to its suppliers in Taiwan. The first order is placed in January solely based on the company's past experience. As the selling season progresses, the company observes actual demand and utilizes the demand information to adjust its original forecasts. Based on the adjustment, the company places its second order in May.
1. Assume gross margin = 10% and loss on unit salvaged = 5%. Calculate Cu and Co for all 6 products (Hint: the critical ratios are the same for the six products)