Jack Ltd is a market leader in the manufacture of apple juice. They operate a reorder level system of inventory management, and the following information is available for green apples: Average usage 800 per dayMinimum usage 450 per dayMaximum usage 1260 per dayLead time for replenishment 16-20 dayReorder quantity 19,500 apples a) Calculate the reorder level b) Calculate the maximum level of inventory c) Calculate the minimum (buffer) inventory level

Jack Ltd is a market leader in the manufacture of apple juice. They operate a reorder level system of inventory management, and the following information is available for green apples: Average usage 800 per dayMinimum usage 450 per dayMaximum usage 1260 per dayLead time for replenishment 16-20 dayReorder quantity 19,500 apples a) Calculate the reorder level b) Calculate the maximum level of inventory c) Calculate the minimum (buffer) inventory level

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Zee Bhd practices proper inventory control to maintain its inventory at the optimum level. Material A is one of the inventory items purchased by the company. The re-order level of Material A is 1,500 kilograms and the re-order quantity is 1,300 kilograms. The lead time and usage are as follows: Lead time: Usage: Minimum 1 week Minimum 600 kilograms per week Maximum 800 kilograms per week Average 1.5 weeks Maximum 2 weeks Required to calculate for Material A: a. Minimum stock level b. Maximum stock level, and c. Average stock level.
SpeeDIY Sdn. Bhd. is an online Do-It-Yourself (DIY) store located in Sintok that provides home delivery of DIY products purchased via the Internet. SpeeDIY uses a fully integrated accounting system and practices automated Economic Order Quantity (EOQ) model in managing its inventory. For each registered item in the inventory database, the system specifies quantity on hand and a desired quantity on hand. When the quantity on hand falls below the desired quantity on hand, a notification automatically pops up on the purchasing clerk's computer screen, alerting the clerk to reorder the item. The purchasing clerk can proceed with the reordering of items simply by checking the acceptance box. When the acceptance box is checked, the purchase order transaction file is created. In addition, the vendor is notified electronically through a transmission from the purchasing system. The purchasing clerk prepares a purchase summary report to his manager at the end of the day. SpeeDIY warehouse has…
SpeeDIY Sdn. Bhd. is an online Do-It-Yourself (DIY) store located in Sintok that provides home delivery of DIY products purchased via the Internet. SpeeDIY uses a fully integrated accounting system and practices automated Economic Order Quantity (EOQ) model in managing its inventory. For each registered item in the inventory database, the system specifies quantity on hand and a desired quantity on hand. When the quantity on hand falls below the desired quantity on hand, a notification automatically pops up on the purchasing clerk's computer screen, alerting the clerk to reorder the item. The purchasing clerk can proceed with the reordering of items simply by checking the acceptance box. When the acceptance box is checked, the purchase order transaction file is created. In addition, the vendor is notified electronically through a transmission from the purchasing system. The purchasing clerk prepares a purchase summary report to his manager at the end of the day. SpeeDIY warehouse has…
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Comprehensive Do it! 1 on page 280 showed cost of goods sold computations under a periodic inventory system. Now let's assume that Gerald D. Englehart Compam uses a perpetual inventory system. The company has the same inventory, purchas and sales data for the month of March as shown earlier: Inventory: March 1 Purchases: March 10 March 20 March 30 March 15 March 25 The physical inventory count on March 31 shows 500 units on hand 200 units @ $4.00 500 units @ $4.50 400 units @ $4.75 300 units @ $5.00 § SIM 2.250 1.900 1.500 500 units Sales: 400 units Instructions Under a perpetual inventory system, determine the cost of inventory on hand at March 31 and the cost of goods sold for March under (a) FIFO. (b) LIFO. and (c average-cost.
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