Question

(Question 1A) New Life Limited uses material of “K” for its regular production of a smart Soap. New life monthly demand of their Soap “NAA LAMIORKOR” is 7,500 units which cost $20 per unit. The company intends making 20% profit on the cost of the soap. The purchase price of the material “K” is the profit on each unit of the soap. Half of the profit on each soap is spent to keep a unit of the material in store per anum. It cost New Life $40 to make an order.
Required:
i) Determine the Economic Order Quantity of material “K” to meet the annual demand of the “NAA LAMIORKOR”
ii) What is the storage cost in the period?
iii) Estimate the total inventory cost .
iii) In terms of values obtained above how are the total inventory cost and storage cost related?

(Question 1B) Use the information below to answer the questions that follow: Wisconsin has 250 employees of 100 lecturers and 150 non-teaching staff. Half of the lecturers just completed their PhD programs in various discipline are eventually absorbed in other universities. Out of these, management of the school has seen the need to replace ¾ of the departed lecturers as the remaining vacant positions can be handled from within the school.
Require: Estimate the labour turnover of the school………………………… Use the information below to answer the questions that follow. In a particular job or work, the following factors apply: Basic hourly rate = $0.80 Incentive on rate = 20% Output is expected to be 12 units per hour.
i) Calculate the piecework rate without incentive
ii) Estimate the piecework rate based on incentive Estimate the total wage if Racheal completes 100 units were produced in an 8 hours.
iii) Using the piecework rate without incentive
iv) Using piecework rate with incentives
v) Using hourly rate without incentive
vi) Using hourly rate with incentives

Answer 1

Solution: