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NEW QUESTION 20
Intensive distribution is most likely to be used for:
- A. Convenience goods.
- B. Unsought goods.
- C. Shopping goods.
- D. Specialty goods.
Answer: A
Explanation:
Convenience goods are consumer goods and services that are usually low-priced and I widely available. Consumers buy them often and with a minimum of comparison and effort.
Examples are soap and newspapers. Producers of convenience goods ordinarily use intensive distribution to sell their products through a large number of retail or wholesale units.
NEW QUESTION 21
What is the method of presenting a noncontrolling interest in a consolidated balance sheet?
- A. As a deduction from contra to goodwill from consolidation if any.
- B. By means of notes to the balance sheet.
- C. As a separate item within the deferred credits section.
- D. As a separate item within the equity section.
Answer: D
Explanation:
A noncontrolling is classified as an equity account and separated from the equity of majority shareholders within that section.
NEW QUESTION 22
What is the number of production runs per year of computer chairs that would minimize the sum of carrying and setup costs for the coming year?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
Explanation:
The EOQ minimizes the sum of carrying and setup costs. The EOQ is the amount at which carrying costs are equal to setup casts. Thus, plugging the data into the EOQ formula results in the following:
Thus, if each lot consists of 1,000 units, five production runs per year are needed to meet the 5,000-unit demand. At this level, setup costs will total US $5,000 5 x $1,000). Carrying costs will also equal US $5,000 10 per unit carrying cost average inventory of 500 units).
Accordingly, total costs are minimized at US $10,000. Jed Ryerson Computer Furniture, Inc. RCF) manufactures a line of office computer chairs. The annual demand for the chairs is estimated to be 5,000 units. The annual cost tic. hold one unit in inventory is US $10 per year, and the cost to initiate a production run is US $1,000. There are no computer chairs on hand, and RCF has scheduled four equal production runs of computer chairs for the coming year, the first of which is to be run immediately. RCF has 250 business days per year, sales occur uniformly throughout the year, and production start-up is within one day. RCF is considering using the following formula for determining the economic order quantity EOQ):
If: A = cast to initiate a production run per purchase order D = annual unit demand K = cost of carrying one unit per year
NEW QUESTION 23
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