ACTIVITY 3- ACCOUNTING FOR MATERIALS1. Krissy operates its factory 300 days per year. Itsannual used of Material Y is 300,000 gallons. It carries a2,500 gallon safety stock of material and its lead time is3 business days.What is the order point for Material Y?2. The EOQ for Material is 7,500 gallons, and thecarrying cost per gallon per year is P.25. What is the totalannual carrying cost for Material?3. Peter's order quantity for tocino is 5,000 kilos. Petermaintains a safety stock of Tocino at 500 kilos, and itsorder point is 1,500 kilos.What is the lead time, assuming daily usage is 50kilos?4. Peter's order quantity for tocino is 5,000 kilos. Petermaintains a safety stock of Tocino at 500 kilos, and itsorder point is 1,500 kilos.What would be the total annual carrying costs,assuming the carrying cost per unit is P.805. The following are data of materials inventory for theyear 2020 of Mars Corp:Number of pounds requiredannuallyCost of placing an orderAnnual carrying cost per pound of144,000P180materialsР36What is the EOQ?6. XYZ has developed the following data from itsMaterial ASafety stockAverage (normally) daily useMaximum daily useMinimum daily useЕOQCost of placing an orderWorking days per year2802002401801,000P20250 daysLead time6 daysWhat is the reorder point? 7. XYZ has developed the following data from itsMaterial ASafety stockAverage (normally) daily useMaximum daily useMinimum daily useЕOQCost of placing an orderWorking days per yearLead time2802002401801,000P20250 days6 daysWhat is the absolute maximum inventory?8. XYZ has developed the following data from itsMaterial ASafety stockAverage (normally) daily useMaximum daily useMinimum daily useЕOQCost of placing an orderWorking days per year2802002401801,000P20250 days6 daysLead timeWhat is the normal maximum inventory?9. XYZ has developed the following data from itsMaterial ASafety stockAverage (normally) daily useMaximum daily useMinimum daily useEOQCost of placing an orderWorking days per yearLead time2802002401801,000P20250 days6 daysWhat is the cost of carrying an inventory per unitper year?

Reorder Point = Lead Time Demand + Safety Stock Lead Time Demand = Average Daily Usage x Lead Time…

Answered: 1. Krissy operates its factory 300 days…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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