ACCOUNTING QUIZ

ACCOUNTING QUIZ

12.1 L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company’s manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these
items according to an ABC classification system? 12.4 Lindsay Electronics, a small manufacturer of electronic research equipment, has approximately 7,000 items in its inventory and has hired Joan Blasco-Paul to manage its inventory. Joan has determined that
10% of the items in inventory are A items, 35% are B items, and 55% are C items. She would like to set up a system in which all A items are counted monthly (every 20 working days), all B items are counted quarterly (every 60 working days), and all C items
are counted semiannually (every 120 working days). How many items need to be counted each day? 12.13 Joe Henry’s machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information
is known about the brackets: a) Given the above information, what would be the economic order quantity (EOQ)? b) Given the EOQ, what would be the average inventory? What would be the annual inventory holding cost? c) Given the EOQ, how many orders would be
made each year? What would be the annual order cost? d) Given the EOQ, what is the total annual cost of managing the inventory? e) What is the time between orders? f) What is the reorder point (ROP)? 12.17 Radovilsky Manufacturing Company, in Hayward, California,
makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,000 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $50. The cost of
each light is $1. The holding cost is $0.10 per light per year. a) What is the optimal size of the production run? b) What is the average holding cost per year? c) What is the average setup cost per year? d) What is the total cost per year, including the cost
of the lights?