3.1 Required: Use the information provided below to calculate the economic order

Question

3.1 Required: Use the information provided below to calculate the economic order quantity for the yesr INFORMATION Legacy limited estimates that it wil need 000 CD's next year at ? cost of R100 per CD. The order cost is R20 per order and the inventory carrying cost is R10 per unit Determine the cost to Zeb Stores (as a percentage) of not sccepting the discount from the informstion provided Jub-Jub wholesalers credit terms to Zeb Stores are 60 days but the supplier is prepared to if Zeb Stores pays the account within 10 days. llow" 2% rebate 3.3 Required: Use the informstion provided below to determine the quantity of product G that should be produced during INFORMATION The sales forecast of Umlazi Hardwsre for product & for 2017 is 30 000 units. The inventory on 01 January 2017is expected to be 3 000 units and a closing inventory of 7 000 units is desired on 31 December 2017 3.4 Required: Calculate the value of inventory and the gross profit for the year ended 31 December 2017 using the First-in- first-out (FIFO) method. Note: use the format of the statement of comprehensive income to present your answers Tailor, a seller of soccer bells hed the following inventory on hand on 01 January 2017 (the beginning of the sccounting period) 10 units at R300 each purchased on 17 October 2016 20 units at R600 each purchased on 12 Novem ber 2016 units at R700 each on 22 December 2016 On 02 March 2017 Tailor purchased an additional 120 soccer bals at R800 each. During the financia year ended 31 December 2017, Tailor Limited sold 180 soccer bells at R1000 esch.

Explanation / Answer

5.1 D Demand Total 5000 units p Purchase cost 100 $ per unit K Ordering cost 20 $ per order h Holding cost 10 $ per unit per year EOQ (Sqrt(2*k*D/h) 141.4214 units 5.2 100% in 60 days 1.7% Per day 100%/60 So in 10 days 16.67% (10*per day %) Discount offered 2% Net loss 14.67% 5.3 D Demand 30000 units OI Opening inv 5000 units CI Closing inv 7000 units So total procduction 32000 units (CI+D-OI)

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