Purchase Solution

Determining the total annual inventory costs

Not what you're looking for?

Ask Custom Question

Sam's Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates fifty-two weeks per year and weekly demand is 150 filters. Sam estimates that it costs $20 to place an order and his annual holding cost rate is $3 per oil filter. Currently, Sam orders in quantities of 650 filters. Calculate the total annual costs associated with Sam's current ordering policy

Total annual costs = $

Purchase this Solution
Solution Summary

This solution provides a detailed, step-by-step explanation of the given accounting problem.

Solution Preview

Total demand=D=150*52=7800

Number of orders per ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

View More Free Quizzes
Related BrainMass Solutions

  • Economic Order Quantity: Minimizing Ordering and Inventory Costs

    While EOQ aims at minimizing inventory cost (ordering and carrying costs), the JIT method aims at zero inventory cost, particularly zero carrying costs. Related concepts: Forecasting Forecasting is determining in advance future events.

  • Determining the cheapest order policy in the given case

    461124 Determining the Cheapest Order Policy in the Given Case A local nursery, Greens, uses 1560 bags of plant food annually. It costs $10 to place an order for plant food.

  • Increasing Order Fill Rates and Develop Strategic Profit Model

    The total profit is calculated by adding the Revenue and subtracting all of the costs: (Inventory Carrying costs, Operating Costs, Annual Interest Payment, Warehouse Costs, Transportation Costs, Total Invoice Reduction for Rehandled Orders and Total Rehandling

  • Accounting Problems with Present Value and Cash Flows

    Ranking is the process of determining whether an investment meets a minimum standard of financial acceptability. c.

  • Corporate Finance Current Total Annual Inventory

    Each order costs $15 and each unit costs $1.50 to carry. She maintains a stock of 200 units. a) What is the current total annual inventory cost?

  • Inventory Management

    Safety Stock: Reorder Point: Annual Order Costs: Annual Holding Costs: Total Annual Costs (including safety stock): b.If the firm decided to change to the periodic review system to control the item's inventory, find the following

  • Economic Order Quantity (EOQ) model

    524501 Economic Order Quantity (EOQ) model The Economic Order Quantity (EOQ) model is helpful in determining accurate inventory decisions. Discuss the major inventory costs that are used in determining the EOQ.

  • Inventory Management

    or 148 bottles per order Average inventory=EOQ/2=148/2=74 units Annual holding costs=Average inventory*holding costs(H)=74*8=$ 592 (No. of orders=Annual demand/EOQ=2500/148=16.89 orders Annual ordering cost=No. of orders*ordering cost(S)=16.89

  • Should North Manufacturing Order Pumps

    (A*O)/Q $500.00 Total inventory maintenance costs under EOQ= 500+500= $1000 Purchase cost= 1000*50= 50000 Total Inventory costs= 51000 Suppose ordering quantity is 100 than the: Find the annual holding costs.

View More Related Solutions