For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly

For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:

Annual demand in units 250
Days used per year 250
Lead time, in days 10
Ordering costs $100
Annual unit carrying costs $20

Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs (17 points)

Click here for the solution: For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly

The standard cost sheet calls for 80 pounds of zinc per batch of 70 faucets

P 12–11: Zinc Faucets

The standard cost sheet calls for 80 pounds of zinc per batch of 70 faucets. Zinc has a standard price of $5.10 per pound. One thousand pounds of zinc are purchased for $5,530. Ten batches of the faucets are produced, and 840 pounds of zinc are used. There was no beginning zinc inventory. All variances are calculated as soon as possible.

Required:
Prepare a table that decomposes the total purchase price of the zinc ($5,530) into its various components as calculated by the standard cost system.

Click here for the solution: The standard cost sheet calls for 80 pounds of zinc per batch of 70 faucets