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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 55
Safety Stock; Reorder Point
Pohling Companymakes a variety of household appliances, including automatic can openers. Small motors used in making can openers are purchased from an outside supplier. Each year, 20,000 small motors are used, at the rate of 80 small motors per day. However, some days as many as 88 small motors are used. It takes Pohling 5 days from the time of order to the time of arrival of the order.
Required:
1. Calculate the reorder point without safety stock.
2. Calculate the amount of safety stock.
3. Calculate the reorder point with safety stock.
Pohling Companymakes a variety of household appliances, including automatic can openers. Small motors used in making can openers are purchased from an outside supplier. Each year, 20,000 small motors are used, at the rate of 80 small motors per day. However, some days as many as 88 small motors are used. It takes Pohling 5 days from the time of order to the time of arrival of the order.
Required:
1. Calculate the reorder point without safety stock.
2. Calculate the amount of safety stock.
3. Calculate the reorder point with safety stock.
Explanation
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Calculation of the reorder point wit...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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