Answer:
Wagner Enterprises and Stone Services
Disposal of old asset:
It could be that Stone Services exchanged its old asset with a new one with a company. In that situation, the debit goes to New Equipment, while the credit is to the old Equipment. Another reason could be that Stone Services sold the old asset on account. In this situation, the debit goes to the Accounts Receivable account, while the old asset is credited accordingly.
Explanation:
When a company disposes of an old asset, it credits the asset account and transfers the amount to the Sale of Asset account. The same is done for the accumulated depreciation, in reverse. When cash is realized from the disposal, the Sale of Asset account is credited, while Cash account is debited. Then, the difference in the Sale of Asset account will be a gain or a loss, depending on the net book value and the cash realized from the sale.
An option is called a derivative security because: Select one: a. its value is derived from that of another asset b. to calculate its worth requires extensive derivations c. it is the basic building block security we use to value all other derivative securities d. its value is derived from the existence of a convex payoff around an exercise value e. none of the above
Answer:
The answer is A.
Explanation:
Firstly, what is a derivative? - A derivative is a financial instrument that derives its value from the value of the underlying asset(bonds, equity etc) or forward rate agreement in the case of interest rate swap. A derivative transforms the value of the underlying.
Examples of derivative are, forward contract, futures, options, swaps etc.
Therefore, option A is the correct option.
Swing Co. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,130.35. However, Swing Co. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on Swing Co.’s bonds?
Answer:
YTM = 7.77%
YTC = 7.62%
Explanation:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {90 + [(1,000 - 1,130.35)/18]} / [(1,000 + 1,130.35)/2]
YTM = 82.758333 / 1,065.175 = 0.07769 = 7.77%
YTC = {coupon + [(call value - market value)/n]} / [(call value + market value)/2]
YTC = {90 + [(1,060 - 1,130.35)/8]} / [(1,000 + 1,130.35)/2]
YTC = 81.20625 / 1,065.175 = 0.07623 = 7.62%
InstaTrack is a newly emerging athletic shoe manufacturing company. After extensive market research, InstaTrack divides its market into professional athletes, "hobbyists" or amateur players, and people who wear shoes as part of their casual attire. Each category has its own needs, traits, and marketing goals. In this scenario, which of the following most accurately reflects Insta Track's marketing strategy?
a) diversification
b) development
c) positioning
d) segmentation
Answer:
The answer is D
Explanation:
Market segmentation is the process of dividing a larger consumers or market into a smaller group(segments) based on some criteria.
One of the importances is that it allows a business to know what their customers' demands, or needs are.
Customers in the same segment respond similarly to market strategies.
Learning by doing suggests that: Multiple Choice greater experience increases production costs. greater experience increases efficiency. diminishing marginal productivity occurs more rapidly.
Answer:
greater experience increases efficiency.
Explanation:
In Business management, Learning by doing suggests that greater experience increases efficiency.
Learning by doing can be defined as the process which involves different individuals making use or an application of their experiences, especially the experiences they acquired by actively engaging in the production, tasks or projects.
Additionally, when significant externalities are actively associated with learning by doing, the level or quantity and quality of production will become sufficiently great and result in an increased returns to scale as more sales and profit would be made by the organization.
It is a good concept and strategy which helps organizations to break even and to meet their goals, aim and objectives.
g If the velocity of money triples, while real GDP and money supply remain unchanged, in the long run, the price level:
Answer:
if velocity triples, then in the long run, price would triple
Explanation:
According to the quantity theory of money
velocity x money supply = output x price
if velocity triples, then in the long run, price would triple
True or False: All other things being equal, firms exhibiting high degrees of operating leverage exhibit lower levels of business risk. This statement is: True False
Answer: False
Explanation:
Operating Leverage is used to measure how much a change in sales translates to a change in income. In general, a higher operating leverage means that a small change in sales leads to a higher change in income. This is quite risky because it shows that even a small error when forecasting sales can lead to a larger error in the cash flow that will be expected from the sales. This makes forecasting harder and increases business risk.
Dothan Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of producing a −18% return. What is the firm's expected rate of return?
Answer:
Therefore, the firm's expected rate of return is 9%.
Explanation:
The expected rate of return of an investment refers to the profit or loss which an investors is anticipating to receive from the investment at a specified rate of return.
The expected rate of return is estimated by totaling the product of potential outcomes and the chances of the outcomes occurring.
For Dothan Inc.'s stock therefore, the expected rate of return can be estimated as follows:
Expected rate of return = (25% * 30%) + (50% * 12%) - (25% * 18%) = 9%
Therefore, the firm's expected rate of return is 9%.
The selling price of a particular product is $6 per unit, fixed costs total $18,000 , and the breakeven sales in dollars is $24,000 . What would be the variable expense per unit?
Answer:
$1.5= unitary variable cost
Explanation:
Giving the following information:
The selling price of a particular product is $6 per unit, fixed costs total $18,000, and the breakeven sales in dollars is $24,000
To calculate the unitary variable cost, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 24,000/6= 4,000
4,000= 18,000/ (6 - unitary variable cost)
24,000 - 4,000unitary variable cost = 18,000
6,000 = 4,000unitary variable cost
1.5= unitary variable cost
The negotiated ________ agreement outlines the rights of both parties in the negotiating process, including work hours, wages, employee benefits and grievance procedures.
Answer:
labor-management
Explanation:
Labor-management agreement is when the leaders and the employees of a company make an agreement that has the goal of protecting the rights of the parties involved and define aspects like salaries and working conditions of the employees. According to this, the answer is that the negotiated labor-management agreement outlines the rights of both parties in the negotiating process, including work hours, wages, employee benefits and grievance procedures because this agreement between employees and employers establishes the conditions the employees will receive for their services to avoid disputes and protect the rights of the parties.
Exhibit 35-4 Refer to Exhibit 35-4. Under a fixed exchange rate system, at the exchange rate of E 3, the dollar is __________ and there is a __________.
Please find diagram for question attached
Question options:
a.
overvalued; surplus of dollars
b.
undervalued; shortage of pesos
c.
overvalued; shortage of dollars
d.
undervalued; surplus of pesos
Answer:
Overvalued and there is a shortage of dollars
Explanation:
An increase in dollar price to buy peso means that dollar here is overvalued as it is above the equilibrium price(E2),and therefore it would be expensive to buy goods that are sold for a certain amount of dollars or in dollar currency with the Mexican pesos. This is because the fixed exchange rate system tries to ensure smooth and inexpensive trade between countries as it has to do with currency trading barriers by pegging a currency to another(in this case dollars) but here the dollar price increase for peso makes it more expensive to buy dollar products with pesos. Also this is caused here by the shortage of dollars.
An investor purchases a put option with a strike price of $100 for $3. This option is considered "in the money" if the underlying is trading:
Answer: a.below $100
Explanation:
When a Put option is considered "in the money", it means that the underlying stock is trading at a value less than the strike price.
This is because with Put options, a person makes a profit if the underlying stock decreases to a value lower than the Strike Price because the Put option gives them to right to sell at the Strike price which means they would be selling at a value higher than the Market.
The above Put is therefore "in the money" if the underlying is selling less than the Strike price of $100.
Suppose the economy is in a recession. The economy needs to expand by at least $300 billion, and the marginal propensity to consume is 0.6. What is the least amount the government can spend to overcome the $300 billion gap
Answer: $120 billion
Explanation:
Fron the question, we are told that an economy is in a recession and needs to expand by at least $300 billion, and the marginal propensity to consume is 0.6.
The least amount the government can spend to overcome the $300 billion gap goes thus:
Since MPC = 0.6, then the multiplier will be:
= 1/(1-MPC)
= 1/(1-0.6)
= 1/0.4
=2.5
We are also informed that the required change in the money supply is $300 billion. Then, the investment needed will be:
= Expansion/Multiplier
= $300 billion/2.5
= $120 billion
If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to Group of answer choices
Answer:
a. divide up the monopoly level of profit amongst themselves
Explanation:
Here are the options :
a. divide up the monopoly level of profit amongst themselves
b. hold down output in the short-run
c. charge a higher price in the short-run
d. both b and c are correct
An oligopoly is when there are few firms operating in an industry.
characteristics of an oligopoly includes :
1. few large firms operating in the industry
2.high barriers to entry or exit of firms.
when oligopolistic firms banded together with the intention of acting like a monopoly, it is known as a collusion.
when there is a collusion, the firms act like a monopoly, that is they decide on the price or quantity to sell at. the profits they earn is divided among the firms
Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
a. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _ and the level of investment spending to _.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to _______ and the level of investment to ________.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget __________ which ________ national saving. This causes the interest rate to ________ and the level of investment spending to _______
Answer:
a. Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _decrease and the level of investment spending to increase_.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to ___increase____ and the level of investment to ___decrease_____.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget ___surplus_______ which ___increases_____ national saving. This causes the interest rate to ___decrease_____ and the level of investment spending to __increase_____
Explanation:
Interest rate decreases with increased savings and this results to increased investment as funds are available at affordable costs. The situation is reversed when the savings are decreased, since the interest rate will increase as there are less savings for investment purposes.
There is a continuous interaction between taxation, savings, government spending, inflation, and investment versus interest rates. This means that interest rates also reflect these factors put together. This why in both fiscal and monetary policies, governments try to strike some balance in order to direct the economy towards desired targets. For example, when the government wants to stimulate the economy, it works to reduce interest rates in order to encourage investments, but this also lowers the propensity to save and encourages the propensity to spend, which trigger inflation and increases interest rate as an aftermath. And this seems to be an endless vicious or virtuous circle, depending on what is achieved by the monetary and fiscal measures in operation.
Your company has assigned one of its vice presidents to function as your project sponsor. Unfortunately, your sponsor refuses to make any critical decisions, always "passing the buck" back to you. What should you do
Explanation:
In this case, the best thing to do is to try to see the challenge of dealing with the lack of critical decision making by the project sponsor, as an opportunity to make the project progress smoothly and reach its best potential.
For this, the ideal is to respect the costs and the deadlines, without exceeding the budgets and the time necessary to carry out the tasks.
The good relationship between the team is also essential for there to be the necessary fluidity for the project to take place organically and as planned. It is also necessary to be attentive to the project's indicators, since monitoring and control are essential to observe the progress of the achievement of goals and the overall performance of the project's progress.
Messaging systems range from semi-public systems such as standard text messaging on mobile phones, to private systems that are closed to anyone outside of invited members.
A. True
B. False
Answer:
True.
Explanation:
Messaging systems range from semi-public systems such as standard text messaging on mobile phones, to private systems that are closed to anyone outside of invited members.
A messaging system can be defined as an electronic device which enables users to send text messages to one or more users depending on the configuration and it ranges from semi-public systems to private systems.
In a semi-public messaging system, messages can be sent between users with little or no restriction to who can send or receive these messages. An example is sending short standard text on mobile phones.
On the other hand, a private messaging system is a type of system that denies access to individuals outside of the group, only invited members are able to send and receive messages.
Cost reduction is still the number one priority for many supply chain executives, according to the MHI and Deloitte survey. Select one: True False
Answer:
MHI and Deloitte Survey
Cost Reduction #1 Priority
True
Explanation:
For supply chain companies to achieve their profit targets, they need to curtail costs. Consumers are not ready to absorb much costs as they are presented with low-priced alternatives. The competition for customers among supply chain organizations is very high. Everyone competes for the dollar the consumer is willing to spend on goods. With property and advertising costs skyrocketing, careful management of the cost structure is required.
Sunland Company reported the following information for 2016: October November December Budgeted sales $1300000 $1200000 $1540000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Sunland receive in November?
Answer:
Total cash receipts - November = $1250000
Explanation:
The credit sales are collected for in such a manner that the 50% amount of this month's sale and the 50% amount of previous month's sales are collected in the correct month. Thus, when calculating the cash receipts for November, we know that the 50% of collections will be for October's sales and the 50% of collections will be from the November's sales.
Cash receipts in November:
From October's sales = 1300000 * 0.5 = $650000
From November's sales = 1200000 * 0.5 = $60000
Total cash receipts - November = 650000 + 600000
Total cash receipts - November = $1250000
On Jan 15th, Mr. White discovered that the net income for the previous year was understated by $60,000. Mr. Black tells Mr. White that this net income of $60,000 should be shared in the proportion of their current capital balances. (Mr. White = 150,000/$250,000 = 60% = $36,000; Mr. Black = $100,000/$250,000 = 40% = $24,000). But Mr. White feels that the additional income should be shared in the ratio of 2:1 ($60,000 x 2/3 = $40,000 Mr. White; $60,000 x 1/3 = $20,000 Mr. Black). Who is correct? Why?
Answer:
Mr. Black is correct. There is a basis established by their current capital balances. Mr. White's ratio of 2 : 1 has not discernible basis, unless that has been their profit sharing ratio.
Explanation:
In the absence of any contrary agreement, partners in a partnership business always share their net income based on their capital contributions. Sometimes, this may not be strictly followed, especially with changes effected over the years, it becomes necessary to adopt home-grown solutions. One of such is the current capital balances, instead of the original capital contributions. This approach takes care of changes and value contributions over a number of years that the business has been in operation, which the current capital accounts will always show.
What is the shortcut for the Find/Replace command screen?
O F5
O Ctrl + ?
O Ctrl + F
O F4
Answer it i Crtl+F
Explanation:
Answer:
is
3. Ctrl + F
he Clark Company fails to record these two adjusting journal entries: Depreciation on Equipment: $10 Cash Dividends declared: $40 Working capital will be:
Answer:
Working Capital will be overstated by the amount of $40.
Explanation:
Of the two the adjusting entries, we need to identify the adjusting entry that affects any element of Working Capital (Current Assets or Current Liability).
Depreciation Entries include : Debit Depreciation Expense (Expense) $10 and Credit Accumulated Depreciation $10.
Cash Dividends Declared Entries include : Debit Dividend (Equity) $40 and Credit Shareholders for Dividends (Liability) $40.
Thus, the Liabilities will be understated due to omission of Cash Dividends Declared Entries.
Subsequently, Working Capital will be overstated by the amount of $40.
You are preparing a presentation on networking for a professional development seminar that your company is hosting for its employees. You look at the attendance list and see that you have good relationships with all of the registered seminar participants. Additionally, this presentation is a follow-up presentation that was requested by previous participants. You know you will have a friendly audience. What organizational pattern would be best for this situation
Answer:
any pattern.
Explanation:
When preparing a presentation for an organizational seminar, it is ideal to pre-analyze the audience for whom you will be presenting, the common characteristics of the audience will be essential for choosing the best organizational pattern.
In the scenario above, it is possible to perceive that the public is known and friendly, therefore any organizational pattern can be used, the focus in this case should be the use of a pattern that increases the involvement of the participants.
The essential thing is for the presenter to convey confidence by passing on important information, preparing beforehand, maintaining a friendly and cordial posture and being open to interaction with the public.
On March 4, Micro Sales makes $4,850 in sales on bank credit cards that charge a 2.5% service charge and deposits the funds into Micro Sales' bank accounts at the end of the business day. Journalize the sales and recognition of expense as a single journal entry.
Answer:
Please see the journal entry below
Explanation:
Dr Cash. $4,728
($4,850 - $121.25)
Dr Credit card expense. $121.25
(2.5% × $4,850)
Cr Sales $4,850
We can infer from the question that sales can be debited to cash since the deposit is at the end of the business day.
Researchers often are particularly interested in the subset of a market that contributes most to sales (for example, heavy beer drinkers or large-volume retailers). What type of sampling might be best to use with such a subset? Why?
Answer:
1122
Explanation:
Stratified Sampling is the type of sampling might be best to use with such a subset.
What is Stratified Sampling?In stratified sampling, respondents are divided into groupings known as strata based on shared traits. A different probability sampling technique is used to randomly sample each subgroup once it has been divided.
When a population has a variety of subgroups, stratified sampling is useful to ensure that every group is represented in the sample. Mere random sample and systematic sampling might not be able to fully represent all of these groupings, especially the relatively uncommon ones.
However, proportional stratified random sampling, where a population is divided into strata and a random sample is subsequently drawn from each in proportion to its size, is arguably the most prevalent variety. For instance, if the population as a whole has 60% females and 40% males.
Thus, Stratified Sampling.
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a) While excavating, the Contractor hits a rock layer. Since the plans and soil report did not mention such rock, the contractor files a claim under: i. Force majeure. ii. Differing site conditions. iii. Design errors/omissions. iv. Unusual weather conditions. v. Changes in owner’s requirements.
Answer:
Differing site conditions
Explanation:
A differing site condition is a condition that has been changed. Since the plan did not mention this rock, the contractor can file a claim under this.
It is a hidden physical condition that is discovered at a site which is actually different from what was expected. It can also be regarded as unforeseen site condition.
To answer this question, refer to the crossover chart. For high volume production process, Process A would most likely be the best option. Group of answer choices True False
Answer: False
Explanation:
For a high volume Process, Process C would be the best option because it has the lowest cost at higher volumes.
Process A would be the best option if the company was looking for a low volume production process because at that point, it has the lowest cost. When it comes to high volume production though, Option A is the worst option as it is the most expensive.
International franchising is
International franchising is a business model that expands the franchising concept into the international marketplace. For example, you can use the rental car concept as a prime example. You can expand the concept of renting a car from a domestic market to an international market.
MONTGOMERY INC.
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 30,800 $ 31,000
Accounts receivable, net 8,900 10,900
Inventory 79,800 63,000
Total current assets 119,500 104,900
Equipment 44,200 37,300
Accum. depreciation—Equipment (19,900) (13,800)
Total assets $ 143,800 $ 128,400
Liabilities and Equity
Accounts payable $ 21,200 $ 22,900
Salaries payable 400 500
Total current liabilities 21,600 23,400
Equity
Common stock, no par value 102,400 94,100
Retained earnings 19,800 10,900
Total liabilities and equity $ 143,800 $ 128,400
MONTGOMERY INC.
Income Statement
For Current Year Ended December 31
Sales $ 38,500
Cost of goods sold (16,000)
Gross profit 22,500
Operating expenses
Depreciation expense $ 6,100
Other expenses 4,700
Total operating expense 10,800
Income before taxes 11,700
Income tax expense 2,800
Net income $ 8,900
Additional Information on Current-Year Transactions
1. No dividends are declared or paid.
2. Issued additional stock for $8,300 cash.
3. Purchased equipment for cash; no equipment was sold.
Use the above information to prepare a statement of cash flows for the current year using the indirect method. (A
Answer:
Montgomery Inc.
Statement of Cash Flow, using the indirect method:
Net income $ 8,900
adjusting non-cash expense:
Depreciation 6,100
Net Cash from operations $15,000
Add: Working Capital:
Accounts receivable (2,000)
Inventory (16,800)
Accounts Payable (1,700)
Salaries payable (100)
Cash from operating activities ($5,600)
Investing Activities:
Purchase of Equipment (6,900)
Financing Activities:
Issue of additional stock 8,300
Net cash flow $4,200
Explanation:
MONTGOMERY INC. Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 30,800 $ 31,000
Accounts receivable, net 8,900 10,900
Inventory 79,800 63,000
Total current assets 119,500 104,900
Equipment 44,200 37,300
Accum. depreciation: Equipment (19,900) (13,800)
Total assets $ 143,800 $ 128,400
Liabilities and Equity
Accounts payable $ 21,200 $ 22,900
Salaries payable 400 500
Total current liabilities 21,600 23,400
Equity
Common stock, no par value 102,400 94,100
Retained earnings 19,800 10,900
Total liabilities and equity $ 143,800 $ 128,400
MONTGOMERY INC.
Income Statement
For Current Year Ended December 31
Sales $ 38,500
Cost of goods sold (16,000)
Gross profit 22,500
Operating expenses
Depreciation expense $ 6,100
Other expenses 4,700
Total operating expense 10,800
Income before taxes 11,700
Income tax expense 2,800
Net income $ 8,900
b) The indirect method of preparing the statement of cash flows starts with the net income and uses the balances in the balance sheet to determine if they are net cash outflows or inflows.
Suppose the 2017 financial statements of 3M Company report net sales of $21.7 billion. Accounts receivable (net) are $3.40 billion at the beginning of the year and $3.42 billion at the end of the year.
1. Compute 3M’s receivable turnover.
2. Compute 3M’s average collection period for accounts receivable in days.
Answer:
A.Receivable turnover 6.36
B. Average collection period 57.38
Explanation:
A. Computation of 3M Company’s receivable turnover
Using this formula
Receivable turnover= Net annual credit sale / (beginning accounts receivable+ending accounts receivable)/2
Let plug in the formula
Receivable turnover=21.7/ ((3.40 +3.42)/2)
Receivable turnover= 21.7/(6.82/2)
Receivable turnover=21.7/3.41
Receivable turnover=6.36
B. Computation of 3M Company’s average collection period for accounts receivable in days
Using this formula
Average collection period = Number of days in a year/Receivable Turnover
Let plug in the formula
Average collection period=365 /6.36
Average collection period= 57.38
Therefore Receivable turnover will be 6.36 and the Average collection period will be 57.38.
Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,100 each. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:
Requirements (annual forecast) 13,200 units
Weight per engine 25 pounds
Order processing cost $230 per order
Inventory carry cost 20 percent of the average value of inventory per year
Note: Assume that half of lot size is in inventory on average (1,100/2 = 550 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY SUPPLIER 1 SUPPLIER 2
UNIT PRICE UNIT PRICE
1 to 1,499 units/order $ 553 $ 552
1,500 to 2,999 units/order 551 552
3,000 + units/order 543 542
Tooling costs $ 28,300 $ 24,400
Distance 120 miles 100 miles
Your assistant has obtained the following freight rates from your carrier:
Truckload (42,000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile
Note: Per ton-mile = 2,000 lbs. per mile.
a-1.Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)
a-2. Which supplier would you select?
b. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
Answer:
A)
Sup 1 $7,415,250
Sup 2 $7,394,080
I will pick supplier 2 as their total cost is lower.
With the assumption of point b:
Supplier 1 $ 7,412,612
Supplier 2 $ 7,419,296
Explanation:
We must use the values for 1 to 1,499 units as we are constrained to a maximum of 1,100 lot size.
Weight of the lot:
1,100 x 25 pounds = 27,500 we do not achieve truckload
So we use the 1.20 per ton-mile
27,500 / 2,000 = 13.75 tons
13.75 tons x $1.20 each x 100 miles x 12 per year = $23,760
13.75 tons x $1.20 each x 120 miles x 12 per year = $19,800
Order cost $230 x 12 per year = $ 2,760
[tex]\left[\begin{array}{cccc}&$Supplier 1&$Supplier 2&$Differential\\$Demand&13200&13200&0\\$Unit Cost&553&552&-1\\$Goods cost&7299600&7286400&-13200\\$Tooling Cost&28300&24400&-3900\\$Truckload&23760&19800&-3960\\$Order Cost&2760&2760&0\\$Holding Cost&60830&60720&-110\\$Total Inventory Cost&7415250&7394080&-21170\\\end{array}\right][/tex]
Truckload: 42,000 / 25 = 1,680 units
new logistic cost:
13,200 / 1,680 = 7.85
This will mean 7 full travels and then another travel with less than full-load with As we cannot send "0.85" of a full load truck
13,200 - 1,680 x 7 = 1,440 units
Logistic cost:
42,000 / 2,000 x $0.80 each x 100 miles x 7 travels
+ 1,440 x 25 / 2000 x $1.20 each x 100 miles = 13920
42,000 / 2,000 x $0.80 each x 120 miles x 7 travels
+ 1,440 x 25 / 2000 x $1.20 each x 120 miles = 16,704
Order Cost: 8 orders x 230 = $1,840
Holding Cost: 1,680 untis / 2 x $551 or $552 x 20%
[tex]\left[\begin{array}{cccc}&Supplier 1&Supplier 2&Differential\\$Demand&13200&13200&0\\$Unit Cost&551&552&1\\$Goods cost&7273200&7286400&13200\\$Tooling Cost&28300&24400&-3900\\$logistic cost&16704&13920&-2784\\$Order Cost&1840&1840&0\\$Holding Cost&92568&92736&168\\$Total Inventory Cost&7412612&7419296&6684\\\end{array}\right][/tex]