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Terminology in process cost accounting  - $4.00 Terminology in process cost accounting - $4.00

Date added: 08/19/2013
Date modified: 08/19/2013
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Downloads: 11
Price 4.00 USD

 

 I. Terminology in process cost accounting

Match each of the following items A through G with the best numbered description of its purpose.

A. Process cost summary

B. Equivalent units of production

C. Goods in Process Inventory account

D. Raw Materials Inventory account

E. Materials requisition

F. Finished Goods Inventory account

G. Factory Overhead Account

 

________ 1. Holds costs of materials until they are used in production or as factory overhead.

________ 2. Holds costs of indirect materials, indirect labor, and similar costs until assigned to production.

________ 3. Holds cost of direct materials, direct labor, and applied overhead until products are transferred from production to finished goods (or another department).

________ 4. Standardizes partially completed units into equivalent completed units.

________ 5. Holds costs of finished products until sold to customers.

________ 6. Describes the activity and output of production department for a period.

________ 7. Notifies the materials manager to send materials to a production department.

 

II. Equivalent units computed – weighted average

The production department in a process manufacturing system completed 191,500 units of product and transferred them to finished goods during a recent period. Of these units, 31,500 were in process at the beginning of the period. The other 160,000 units were started and completed during the period. At period-end, 29,500 units were in process. Compute the department’s equivalent units of production with respect to direct materials under each of three separate assumptions:

1. All direct materials are added to products when processing beings.

2. Direct materials are added to products evenly throughout the process. Beginning goods in process inventory was 40% complete and ending goods in process inventory was 75% complete.

3. One-half of direct materials is added to products when the process begins and the other half is added when the process is 75% complete as to direct labor. Beginning goods in process inventory is 40% complete as to direct labor, and ending goods in process inventory is 60% complete as to direct labor.

 

III. Interpretation of journal entries in process cost accounting

The following journal entries are recorded in Kiera Co.’s process cost accounting system. Kiera produces handbags and scarves. Overhead is applied to production based on direct labor cost for the period. Prepare a brief explanation (including any overhead rates applied) for each journal entry (a) through (j).


IV. Completing a process cost summary
The following partially completed process cost summary describes the May production activities of Raman Company. Its production output is sent to its warehouse for shipping. Prepare its process cost summary using the weighted-average method.


V. Process costing – weighted average
Ebony Company uses the weighted-average method of process costing to assign production costs to the products. Information for April follows. Assume that all materials are added at the beginning of the
production process, and that direct labor and factory overhead are added uniformly throughout the process.
Using


Using the format illustrated below, complete a process cost summary using the following sections:
1. Costs charged to production
2. Unit cost information
3. Equivalent units of production
4. Cost per Equivalent unit of production
5. Cost assignment and reconciliation


module 6 problems - $4.00 module 6 problems - $4.00

Date added: 06/03/2012
Date modified: 06/03/2012
Filesize: 38 kB
Downloads: 7
Price 4.00 USD

Module Six Problems

 

1. Brittle Corp. obtained the following information from the Raw Materials Inventory account and purchasing records for the third quarter of the current year:

 

Beginning Raw Materials = $94,000

Ending Raw Materials = $78,000

April Purchases = $62,000

May Purchases = $45,000

June Purchases = $58,000

 

What was the amount of Raw Materials used during this quarter?

 

 

2. Lebanon Corp. obtained the following information from its absorption costing accounting records:

 

Operating Income = $59,000

Total Product Costs incurred during the period = $48,000

Value of Beginning Work-in-Process and Finished Goods Inventories = $0

Value of Ending Work-in-Process and Finished Goods Inventories = $0

Sales = $126,000

 

What are the total Period Costs incurred this period?

 

3. Jake’s Corp. obtained the following information from its accounting records:

 

Sales = $416,000

Beginning Finished Goods Inventory = $184,500

Ending Finished Goods Inventory = $168,000

Cost of Goods Sold = $311,000

Ending Work-in-Process Inventory = $97,500

 

What was the Cost of Goods Manufactured for this period?

 

4. Saturn, Inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $7,500,000 and total direct labor hours to be 125,000 hours. Calculate Saturn’s predetermined overhead rate. In April, Saturn incurred actual overhead costs of $1,375,000 and used 24,000 hours. How much was Saturn’s over- or underapplied overhead for the month of April?

 

 

5. Lexicon, Inc. had beginning inventory in March consisting of 15,000 units (60 percent converted) and ending inventory consisting of 20,000 units (40 percent converted). In addition, 45,000 units were started during the period. How many equivalent units for conversion costs were in process March using the weighted average method?

 

 

6. Presented below is selected information from the Access Company’s current period accounting
records:

 

Sales

 

 

$20,000

Raw Materials Used

 

5,000

Direct Labor Costs

 

2,000

Period Costs (Selling and Administrative)

 

5,000

Beginning Raw Material Inventory

 

600

Ending Raw Material Inventory

 

2,000

Net Income

 

400

Beginning Work-in-Process Inventory

 

0

Ending Work-in-Process Inventory

 

600

Beginning Finished Goods Inventory

 

1,400

Ending Finished Goods Inventory

 

800

 

 

Required:

Determine the following (in dollars):

a. Raw Material Purchases

b. Gross Profit

c. Cost of Goods Manufactured

d. Manufacturing Overhead

Quiz solution - $4.00 Quiz solution - $4.00

Date added: 02/24/2012
Date modified: 02/24/2012
Filesize: 919 kB
Downloads: 5
Price 4.00 USD

Question 1  
As the compounding rate becomes lower and lower, the future value of inflows approaches
Question options:
0
infinity
need more information
the present value of the inflows

Question 2  
If you invest $8,000 at 11% interest, how much will you have in 9 years?
Question options:
$24,032
$20,464
$123,328
$18,824

Question 3  
The concept of time value of money is important to financial decision making because
Question options:
all of the others
it can be applied to future cash flows in order to compare different streams of income.
it recognizes that earning a return makes $1 worth more today than $1 received in the future.
it emphasizes earning a return on invested capital.

Question 4  
How much must you invest at 8% interest in order to see your investment grow to $6,000 in 8 years?
Question options:
$3,105
$2,332
$2,500
$3,241

Question 5  
As the interest rate increases, the present value of an amount to be received at the end of a fixed period
Question options:
remains the same.
Not enough information to tell.
increases.
decreases.

Question 6  
Bill Williams sets aside $2,000 each year for 5 years. He then withdraws the funds on an equal annual basis for the next 4 years. If Bill wishes to determine the amount of the annuity to be withdrawn each year, he should use following two tables in this order:
Question options:
present value of an annuity of $1; future value of an annuity of $1
future value of an annuity of $1; present value of an annuity of $1
future value of an annuity of $1; future value of a $1
future value of an annuity of $1; present value of a $1

Question 7  
To save for her newborn son's college education, Lea Wilson will invest $1,000 at the beginning of each year for the next 18 years. The interest rate is 7 percent. What is the future value at the end of 18 years?
Question options:
$3,380
$33,999
$37,450
$37,379

Question 8  
Mr. Blochirt is creating a college investment fund for his daughter. He will put in $850 per year for the next 15 years and expects to earn a 9% annual rate of return. How much money will his daughter have when she starts college?
Question options:
$23,079
$11,250
$22,263
$24,957

Question 9  
Mr. Nailor invests $5,000 in a certificate of deposit at his local bank. He receives annual interest of 8% for 7 years. How much interest will his investment earn during this time period?
Question options:
$3,590
$8,570
$2,915
$3,570

Question 10  
Dr. J. wants to buy a Dell computer which will cost $2,988 four years from today. He would like to set aside an equal amount at the end of each year in order to accumulate the amount needed. He can earn 5% annual return. How much should he set aside?
Question options:
$693.27
$627.93
$531.81
$823.15

Question 11  
Mr. Fish wants to build a house in 12 years. He estimates that the total cost will be $190,000. If he can put aside $10,000 at the end of each year, what rate of return must he earn in order to have the amount needed?
Question options:
Between 8% and 9%
14%
7%
Between 11% and 12%

Question 12  
Babe Ruth Jr. has agreed to play for the Cleveland Indians for $3 million per year for the next 10 years. What table would you use to calculate the value of this contract in today's dollars?
Question options:
Present value of a single amount
Present value of an annuity
Future value of an annuity
None of the above

Question 13  
The shorter the length of time between a present value and its corresponding future value,
Question options:
the lower the present value, relative to the future value.
the higher the present value, relative to the future value.
none of the answers are correct
the higher the interest rate used in the present-valuation.

Question 14  
Mr. Darden is selling his house for $155,000. He bought it for $66,000 nine years ago. What is the annual return on his investment?
Question options:
Between 9% and 10%
13%
Between 10% and 11%
Between 14% and 16%

Question 15  
Joe Nautilus has $120,000 and wants to retire. What return must his money earn so he may receive annual benefits of $20,000 for the next 12 years.
Question options:
Greater than 15%
14%
Less than 12%
Between 12% and 13%

Question 16  
John Doeber borrowed $125,000 to buy a house. His loan cost was 7% and he promised to repay the loan in 15 equal annual payments. How much are the annual payments?
Question options:
$17,383
$9,250
$3,633
$13,724

Question 17  
After 16 years, 100 shares of stock originally purchased for $1000 was sold for $7,000. What was the yield on the investment? Choose the closest answer.
Question options:
8%
19%
13%
5%

Question 18  
The future value of a $1000 investment today at 8 percent annual interest compounded semiannually for 7 years is
Question options:
$1,469
$1,732
$1,480
$1,714

Question 19  
In a general sense, the value of any asset is the
Question options:
value of past dividends and price increases for the asset.
present value of the cash flows received from the asset.
value of the dividends received from the asset.
future value of the expected earnings discounted by the asset's cost of capital.

Question 20  
A ten-year bond, with par value equals $1000, pays 8% annually. If similar bonds are currently yielding 4% annually, what is the market value of the bond? Use semi-annual analysis.
Question options:
$1297.85
$1,324.88
$1,327.04
$1,000.00

Question 21  
If the inflation premium for a bond goes up, the price of the bond
Question options:
goes up.
need more information.
goes down.
is unaffected.

Question 22  
The risk premium is likely to be highest for
Question options:
U.S. government bonds.
either b or c
gold mining expedition.
corporate bonds.

Question 23  
A ten-year bond pays 11% interest on a $1000 face value annually. If it currently sells for $1,105, what is its approximate yield to maturity?
Question options:
7.94%
12.66%
9.36%
8.10%

Question 24  
The longer the time to maturity:
Question options:
the less the price increase from an increase in interest rates.
the greater the price increase from a decrease in interest rates.
the greater the price increase from an increase in interest rates.
the less the price decrease from a decrease in interest rates.

Question 25  
What is the approximate yield to maturity for a seven-year bond that pays 11% annual interest on a $1000 face value if the bond sells for $932?
Question options:
12.0%
10.6%
11.0%
12.48%

Question 26  
The growth rate for the firm's common stock is 7%. The firm's preferred stock is paying an annual dividend of $5. What is the preferred stock price if the required rate of return is 6%?
Question options:
$62.5
$5
$500
none of the above

Question 27  
A common stock which pays a constant dividend can be valued as if it were
Question options:
discount bond.
stock paying a growing dividend.
preferred stock.
corporate bond.

Question 28  
An issue of common stock has just paid a dividend of $3.75. Its growth rate is 8%. What is its price if the market's rate of return is 14%?
Question options:
$46.88
$62.50
$50.63
none of the above


 An issue of common stock has just paid a dividend of $3.75. Its growth rate is 8%. What is its price if the market's rate of return is 14%?
D1 = Dividend at the end of the first year
If the growth rate was 8%, then D1 = $3.75 + ($3.75 x .08) = $4.05
The calculations would then be:
Po = $4.05 / (.14 - .08)
Po = $4.05 / .06
Po = $67.50
Since this answer was not available - "none of the above" was the correct answer.
correct
Question 29  
An issue of common stock is selling for $57.20. The year end dividend is expected to be $2.52 assuming a constant growth rate of 6%. What is the required rate of return?
Question options:
10.4%
4.1%
10.1%
none of the above
Question 30  
An issue of common stock is expected to pay a dividend of $4.50 at the end of the year. Its growth rate is equal to 3%, and the current share price is $40. What is the required rate of return on the stock?
Question options:
between 14% and 17%
between 12% and 14%
between 10% and 12%
between 7% and 10%

Question 31  
Which of the following properly represents the hierarchy of creditor and stockholder claims?
Question options:
Preferred stock common stock, subordinated debentures.
Debentures, preferred stock, common stock.
Common stock, senior secured debt, subordinated debentures.
None of the above

Question 32  
Buchanan Corp. is refunding $12 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 34%. The call premium is 8%. What is the net cost of the call premium?
Question options:
$633,600
$326,400
$702,000
$960,000

Question 33  
With regard to interest rates and bond prices it can be said that
Question options:
long-term rates are more volatile than short-term rates.
a 1% change in interest rates will cause a greater change in short-term bond prices than long-term prices.
a 1% change in interest rates will cause a greater change in long-term bond prices than short-term prices.
a decrease in interest rates will cause bond prices to fall.

Question 34  
A bond with a coupon rate of 7.5%, maturing in 10 years at a value of $1,000 and a current market price of $850, will have a yield to maturity (using the approximation formula) of:
Question options:
between 10% and 10.5%
between 10.5% and 11%
between 9.5% and 10%
between 11% and 11.5%

Question 35  
Solow Corp. has a bond with annual interest payments of $125 maturing in 15 years at a value of $1,000 per bond. The current market price is $960. What will the nominal yield be?
Question options:
12.5%
12%
12.7%
11.5%

Question 36  
Which of the following does not represent a tax implication in the bond refunding decision?
Question options:
Underwriting costs of new issue
Cost savings in lower interest rates
All of the above have tax implications.
Call premium

Question 37  
From the corporate issuer viewpoint, a zero-coupon bond allows the firm to:
Question options:
defer payment obligations
Take advantage of low volatility.
receive deferred income for tax purposes.
reduce the multiplier of the initial investment.

Question 38  
An 8 percent, 20-year, $1,000 par value floating rate bond is purchased in 2000. By the year 2010, rates on bonds of similar risk are up to 10 percent. What is the bond worth in 2010?
Question options:
between $850 and $950
between $750 and $850
less than $750
more than $950

Question 39  
The Haavelmo Widget Corporation has just signed an 84-month lease on an asset with an 8-year life. The lessor will retain the property at the end of the lease, and the present value of the minimum lease payments is $250,000. The estimated fair value of the property is $300,000. Is this an operating lease?
Question options:
yes
if the company elects to treat the lease as an operating lease
no
more information is required

Question 40  
Floating rate bonds are most likely to be popular with investors when it is anticipated that
Question options:
interest rates will stay the same.
interest rates will go up.
interest rates will go down.
short-term interest rates will be higher than long-term interest rates.

Question 41  
Disclosure requirements for a Eurobond are _____ demanding than those of the Securities and Exchange Commission or other domestic regulatory agencies.
Question options:
need more information
more
less
the same

Question 42  
Which of the following are benefits of a rights offering?
Question options:
Rights offerings increase return on equity.
Rights offerings have lower margin requirements.
Rights offerings substantiate higher debt to equity ratios
None of the above.

Question 43  
The Harsanyi Corp. is considering four investments. Which provides the highest after-tax return for Harsanyi Corp. if it is in the 34% tax bracket?
Question options:
corporate bonds at 8.0%
preferred stock at 6.0%
municipal bonds at 5.0%
treasury bonds at 6.0%

Question 44  
Buggy Whip Manufacturing Company is issuing preferred stock yielding 10%. Selten Corporation is considering buying the stock. Buggy's tax rate is 0% due to continuing heavy tax losses, and Selten's tax rate is 44%. What is the after-tax preferred yield for Selten?
Question options:
8.68%
3.4%
8.98%
10.0%

Question 45  
Which of the following is the correct order of corporate issues based on risk and return? (most risk-return to least risk-return)
Question options:
Common stock, long-term government bonds, secured debt, subordinated debt.
Common stock, secured debt, subordinated debentures, preferred stock.
Preferred stock, common stock, subordinated debentures, secured debt.
Common stock, subordinated debentures, secured debt, treasury bills.

Question 46  
The floating rate feature on preferred stock allows the shareholders
Question options:
to receive a higher or lower dividend yield depending on current competitive market conditions.
to receive dividends which the corporation did not pay in previous years.
to receive more dividends than the quoted yield when the firm enjoys a good year.
to pay lower taxes when the dividend yield increases.

Question 47  
Which of the following is not a very common feature of preferred stock?
Question options:
Conversion feature
Call feature
Cumulative dividends
Voting rights

Question 48  
A stock is said to sell "ex-rights"
Question options:
after the terms of the subscription have been made public.
when the period in which the subscription privilege is to be exercised has expired.
after the rights have all been exercised and the new issue is completely sold.
when transfer of stock ownership no longer carries with it the privilege of subscription.

Question 49  
The purpose of cumulative voting is
Question options:
to allow minority stockholders the possibility of a voice on the board of directors.
to obstruct unfriendly mergers and takeover efforts.
to maintain majority control of the board of directors.
to prevent the dilution of common stock through pre-emptive rights offerings.

Question 50  
Which of the following is not a true statement?
Question options:
A minority interest can still elect members to the Board of Directors under cumulative voting even though someone else owns 51% of the stock.
Bondholders may force a corporation into bankruptcy for failure to make interest payments.
Common stockholders are legally entitled to some dividend.
Common stockholders have a residual claim to income.

 


 

Module 9 problems - $4.00 Module 9 problems - $4.00

Date added: 06/03/2012
Date modified: 06/03/2012
Filesize: 157.34 kB
Downloads: 4
Price 4.00 USD

Module Nine Problems

1. Managers of Wheldon Manufacturing are analyzing variable overhead variances for the fiscal period just ended. The flexible budget called for $80,000 in variable overhead but actual variable overhead was $95,000. In computing the overhead variances, Wheldon’s management discovered that it had used 3,800 hours of direct labor, rather than the budgeted (Hours of direct labor is the single overhead driver of variable overhead). The standard variable overhead rate per hour of direct labor is $20.00.  What is Wheldon's variable overhead spending variance?

 

2. Rank Division operates as a revenue center.  Data for this month are as follows:

 

 

 

Actual

 

Budget

Sales in units

21,500

18,500

Selling price per unit

$77

$88

Variable expense per unit

 

$70

 

What is the total revenue variance?

3. Oaks Edge Company's budgeted sales were 22,500 units at $76 per unit. Actual sales were 21,750 units at $79 per unit. What was Oaks Edge sales price variance?

 

4. Sand Soap Company management is analyzing the company’s standard cost variances for direct materials for the most recent period.  The following information was available from company records.

Actual quantity of materials used

36,000 units

Budgeted quantity of materials used

34,000 units

Actual price paid for materials

$9 per unit

Budgeted price paid for materials

$11 per unit

There were no increases or decreases in inventories during the period.  Calculate the materials quantity variance for the period.

5. The following budgeted and actual volume and cost data are for January of this year:

 

 

     Budget

 

        Actual

Volume

20,000

18,000

 

Budgeted manufacturing costs:

 

 

  Variable costs per unit:

 

 

      Direct materials

$40.00

 

      Direct labor

12.00

 

      Overhead

2.25

 

Total fixed overhead costs

$150,000

 

 

Actual manufacturing costs:

 

 

      Direct materials

 

$1,320,000

      Direct labor

 

396,000

      Variable overhead

 

82,000

      Fixed overhead

 

175,000

 

 

a.     Prepare a static budget analysis of production costs for January of this year. 
b. Prepare a flexible budget analysis of production costs for January of this year

M4_Case_study_problems - $7.00 M4_Case_study_problems - $7.00

Date added: 09/13/2015
Date modified: 09/13/2015
Filesize: 203.7 kB
Downloads: 3
Price 7.00 USD

4-1       Ross White’s machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year.  These brackets are purchased from a supplier 100 miles away for $19 each, and the lead time is 4 days.  The holding cost per bracket per year is 10% of the unit cost and the ordering cost per order is $25.  There are 250 working days per year.

 

a.       What is the EOQ?

b.      Given the EOQ, what is the average inventory?

c.       What is the annual inventory holding cost?

d.      In minimizing cost, how many orders would be made each year?

e.       What would be the annual ordering cost?

f.       Given the EOQ, what is the total annual inventory cost (including purchase cost)?

g.      What is the time between orders?

h.      What is the ROP?

 

4-2       Douglas Boats is a supplier of boating equipment for the states of Oregon and Washington.  It sells 5,000 White Marine WM-4 diesel engines every year.  These engines are shipped to Douglas in a shipping container of 100 cubic feet, and Douglas Boats keeps the warehouse full of these WM-4 motors.  The warehouse can hold 5,000 cubic feet of boating supplies.  Douglas estimates that the ordering cost is $50 per order, and the carrying cost is estimated to be $50 per motor per year.  Douglas Boats is considering the possibility of expanding the warehouse for the WM-4 motors. 

 

a.       How much should Douglas Boats expand.

b.      How much would it be worth for the company to make the expansion?  Assume demand is constant throughout the year.

 

4-3       Ralph Janaro simply does not have time to analyze all the items in his company’s inventory.  As a young manager, he has more important things to do.  The following is a table of six items in inventory along with the unit cost and the demand in units. 

IDENTIFICATION CODE

UNIT COST

($)

DEMAND

IN UNITS

XX1

5.84

1,200

B66

5.40

1,110

3CPO

1.12

896

33CP

74.54

988

R2D2

4.80

1,257

RMS

2.08

961

a.       Find the total amount spent on each item during the year.  What is the total investment for all these?

b.      Find the percentage of the total investment in inventory that is spent on each item.

c.       Based on the percentages in part (b), which item(s) would be classified in categories A, B, and C using ABC analysis?

d.      Which item(s) should Ralph most carefully control using quantitative techniques?

e.       How low would the demand for 33CP have to before it change to a different category?

 

 

4-4       The marginal loss on Washington Reds, a brand of apples from the state of Washington, is $40 per case.  The marginal profit is $15 per case.  During the past year, the mean sales of Washington Reds in cases was 41,000 cases, and the standard deviation was 4,480.  How many cases of Washington Reds should be brought to market?  Assume that sales follow a normal distribution.

 

4-5       Paula Shoemaker produces a weekly stock market report for an exclusive readership.  She normally sells 3,000 reports per week, and 70% of the time her sales range from 2,850 to 3,150.  The report costs Paula $25 to produce, but Paula is able to sell reports for $350 each.  Of course, any reports not sold by the end of the week have no value.  How many reports should Paula produce each week?

 

4-6       The Webster Manufacturing Company produces a popular type of serving cart.  This product, the SL72, is made from the following parts: 1 unit of Part A, 1 unit of Part B, and 1 unit of Subassembly C.  Each subassembly C is made up of 2 units of Part D, 4 units of Part E, and 3 units of Part F.  Develop a material structure tree for this.  The lead time for each of the parts in the SL72 is one week, except for Part B and Part E, which have a lead time of two weeks. 

a.       Develop a net materials requirements plan for an order of 800 SL72s.  Assume that currently there are no parts in inventory.

b.      Develop a net material requirements plan assuming that there are currently 150 units of Part A, 60 units of Part B, 40 units of Subassembly C, and 100 units of Part F currently in inventory.


Martin-Pullin Bicycle Corporation

 

Martin-Pullin Bicycle Corp. (MPBC), located in Dallas, is a wholesale distributor of bicycles and bicycle parts.  Formed in 1981 by cousins Ray Martin and Jim Pullin, the firm’s primary retail outlets are located within a 400-mile radius of the distribution center.  These retail outlets receive the order from Martin-Pullin within two days after notifying the distribution center, provided that the stock is available.  However, if an order is not fulfilled by the company, no backorder is placed; the retailers arrange to get their shipment from other distributors, and MPBC loses that amount of business.

The company distributes a wide variety of bicycles.  The most popular model, and the major source of revenue to the company, is the AirWing.  MPBC receives all the models from a single manufacturer overseas, and shipment takes as long as four weeks from the time an order is placed.  With the cost of communication, paperwork, and customs clearance included, MPBC estimates that each time an order is placed, it incurs a cost of $85.  The purchase price paid by MPBC, per bicycle, is roughly 65% of the suggested retail price for all the styles available, and the inventory carrying cost is 2% per month (24% per year) of the purchase price paid by MPBC.  The retail price (paid by the customers) for the AirWing is $250 per bicycle.

MPBC is interested in making an inventory plan for 2014.  The firm wants to maintain a 95% service level with its customers to minimize the losses on the lost orders.  The data collected for the past two years are summarized in the table below.  A forecast for AirWing model sales in the upcoming year, 2014 has been developed and will be used to make an inventory plan for MPBC.

 

Discussion Questions

 

1.      Develop an inventory plan to help MPBC.

2.      Discuss ROPs and total costs.

3.      How do you handle the fact that the Reorder Point is larger than the EOQ?

4.      How can you address demand that is not at the level of the planning horizon?

 

                        Demand for AirWing Model

Month             2012         2013         Forecast for2014

January              6               7                           9

February          12             14                         16

March              24             27                         31

April                46             53                         59

May                 75             86                         96

June                 47             54                         61

July                  30             34                         39

August            18             21                         24

September       13             15                         17

October           12             13                         15

November       22             25                         29

December        38             42                         46

Total                343            391                        443

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