Question

Simpson’s Shoes expects to sell 315 pairs of a certain running shoe in a year. There is a fixed charge of $140 per order and each pair of shoes cost the store $7. It costs the store $8 to store a pair of shoes for a year.

Find the inventory cost as a function of **ONLY**
the number of shoes/order.

Use methods of Calculus shown recently in class to minimize the inventory costs. Give appropriate units.

x=____________________________

r=____________________________ Work->

Minimum inventory cost_________________Work->

Use methods of Calculus shown recently in class to
**prove** that you have mimimized the inventory cost.
**State the domain**for the number of shoes/order.

Answer #1

let the number of pair of shoes/order be x

number of orders

storage costs

reorder costs =cost per order * number of orders

total inventory cost =storage costs+reorder costs

differentiate with respect to x

for critical point ,C'(x)=0

inventory cost is minimum when number of pair of shoes/order is 105

number of orders

Minimum inventory cost is 3045 dollars

Blue shoe currently sells 13,000 pairs of athletic shoes
and 4,500 dress shoes every year. The athletic shoes sell for an
average price of $79 a pair while the average price for the dress
shoes is $49. The company is considering expanding its offerings to
include sandals at a price of $29 a pair. Blue Shoe estimates the
addition of sandals to its lineup will reduce its dress shoe sales
by 1,000 pairs and increase its athletic shoe sales by...

LaRue Shoe Co. produces and sells an excellent-quality walking
shoe. After production, the shoes are distributed to 20 warehouses
around the country. Each warehouse services approximately 100
stores in its region. LaRue uses an EOQ model to determine the
number of pairs of shoes to order for each warehouse from the
factory. Annual demand for Warehouse OR2 is approximately 120,000
pairs of shoes. The ordering cost is $250 per order. The annual
carrying cost of a pair of shoes is...

A bookstore expects to sell 400 calculus textbooks during the
next year. It costs $4 to store one calculus textbook for one
year. To reorder, there is a fixed cost of $12.50, plus $0.50 for
each calculus textbook ordered. In what lot size and how many times
per year should an order be placed to minimize inventory costs?

II. Corriendo Company manufactures running shoes. For next year,
Corriendo plans on producing 20,000 pairs of its most popular line
and is budgeting the following costs:
Direct materials
$225,000
Direct labor
135,000
Overhead
240,000
Required:
Round your answers to two decimal places.
1. Calculate the prime cost per pair of shoes:
$
2. Calculate the conversion cost per pair of
shoes: $
3. Calculate the total manufacturing cost per
pair of shoes: $

13) A furniture showroom expects to sell 250 sofas a year. Each
sofa costs the $300, and there is a fixed charge of $500 per order.
If it costs $100 to store a sofa for a year. In your asnwer provide
the storgae cost function, reoder cost function, the total cost
fuction, and use these information to answer how large should each
order be and how often should order be placed to minimize inventory
costs?

A jewelry store expects to sell 120 diamond bracelets during the
next year. It costs $2.25 to store one diamond bracelet for one
year. There is a fixed cost of $15 for each order. Find the lot
size and the number of orders per year that will minimize inventory
costs.

Aulia Company sells shoes for kids at its store. These shoes
cost Aulia RM 15 each pair. Customers want to buy the shoes at a
rate of 240 pairs per week. The company operate 52 weeks per year.
Aulia, the owner, estimates his ordering cost at RM 50. Annual
holding costs are 20 % of the unit cost.
Compute all the following elements and shows the related
calculation.
Optimal order quantity
Number of order
Holding cost
Ordering cost

Winslow Inc.
Product Income Statements—Absorption Costing
For the Year Ended December 31, 20Y1
Cross Training Shoes
Golf Shoes
Running Shoes
Revenues
$320,800
$198,900
$169,100
Cost of goods sold
(166,800)
(97,500)
(113,300)
Gross profit
$154,000
$101,400
$55,800
Selling and administrative expenses
(132,400)
(73,000)
(93,200)
Operating income
$21,600
$28,400
$(37,400)
In addition, you have determined the following information with
respect to allocated fixed costs:
Cross Training Shoes
Golf Shoes
Running Shoes
Fixed costs:
Cost of goods sold
$51,300
$25,900
$23,700
Selling and...

Winslow Inc. manufactures and sells three types of shoes. The
income statements prepared under the absorption costing method for
the three shoes are as follows:
Winslow Inc.
Product Income Statements—Absorption Costing
For the Year Ended December 31, 20Y1
1
Cross Training Shoes
Golf Shoes
Running Shoes
2
Revenues
$810,000.00
$710,000.00
$635,000.00
3
Cost of goods sold
410,000.00
339,400.00
422,000.00
4
Gross profit
$400,000.00
$370,600.00
$213,000.00
5
Selling and administrative expenses
353,000.00
267,300.00
356,400.00
6
Income (Loss) from operations
$47,000.00
$103,300.00...

Winslow Inc. manufactures and sells three types of shoes. The
income statements prepared under the absorption costing method for
the three shoes are as follows:
Winslow Inc.
Product Income Statements—Absorption Costing
For the Year Ended December 31, 20Y1
Cross Training Shoes
Golf Shoes
Running Shoes
Revenues
$357,800
$221,800
$184,100
Cost of goods sold
186,100
108,700
123,300
Gross profit
$171,700
$113,100
$60,800
Selling and administrative expenses
147,700
81,400
101,500
Income (loss) from operations
$24,000
$31,700
$(40,700)
In addition, you have determined...

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