BUSINESS COLLEGE

Concert Production is planning an appearance of the top band Iggy Wiggy. They plan to buy custom desgined T-shirts to sell at the stadium where the concert will take place. The T-shirt will sell for $25 and the cost per shirt is $8. Previous experience at the Concert Productions suggests that after the concert is over, T-shirts can still be sold, but the selling price will only be $5 per shirt. Based on analysis of previous similar concerts, the company estimates sales of the T-shirt will be 6,000 units. However, the analysis also shows that the standard deviation in similar situations is 800 units.How many Iggy Wiggy T-shirts should the company order?

Answers

Answer 1
Answer:

Answer:

Iggy Wiggy T-shirts should order 6,829 units of T-shirt

Explanation:

Cost per T-shirt = $8.00

Selling Price per T-shirt = $25

Marginal Profit = 25 - 8 = $17

Marginal Loss when t-shirt is sold for $5 = $8 - $5 = $3

Mean = 6000 units

Standard deviation = 800 units

Using the News Vendor Model

Q = MP / MP + ML

Q = 17 / (17+3)

Q = 17 / 20

Q = 0.85

Using NORMINV in Ms excel

= NORMINV (probability, mean, standard deviation)

= NORMINV(0.85,6000,800)

= 6829.14 units

Thus, Iggy Wiggy T-shirts should order 6829 units of T-shirt.

Related Questions

Chrissie's Cooking Supply Company has 5,000 skillets in their warehouse at the end of July. One quarter of these skillets were held over from the month of June at a cost of $12 per skillet. The remaining skillets were purchased in July at a cost of $15 per skillet. At the beginning of August they received another 2,000 skillets at a cost of $17 per skillet. The warehouse sold and shipped 2,198 skillets during August. Chrissie's Cooking Supply Company uses LIFO to value their inventory. What would be the remaining balance of skillets in the inventory account at the end of August?
If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it does not represent a real financial cost to your firm as long as the customer periodically pays off its entire balance. A. True B. False .
What role should government play in a free market economy?
An All-Pro defensive lineman is in contract negotiations. The team has offered the following salary structure: Time Salary 0 $ 5,700,000 1 4,300,000 2 4,800,000 3 5,300,000 4 6,700,000 5 7,400,000 6 8,200,000 All salaries are to be paid in a lump sum. The player has asked you as his agent to renegotiate the terms. He wants a $9.2 million signing bonus payable today and a contract value increase of $1,200,000. He also wants an equal salary paid every three months, with the first paycheck three months from now. If the discount rate is 4.7 percent compounded daily, what is the amount of his quarterly check? Assume 365 days in a year. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)
An company buys a color printer that will cost $18,000 to buy, and last 5 years. It is assumed that it will require servicing costing $500 each year. What is the equivalent annual annuity of this deal, given a cost of capital of 12%? A. -$3983 B. -$4002 C. -$4957 D. -$5493

Which of the following best describes why the aggregate demand curve is downward sloping? a. As the aggregate price level decreases, the stock of existing physical capital increases.
b. As the aggregate price level increases, consumer expectations about the future change.
c. An increase in the aggregate price level causes consumer and investment spending to fall because consumer purchasing power decreases and money demand increases.
d. As a good\'s price increases, holding all else constant, the good\'s quantity demanded decreases.

Answers

Answer: c. An increase in the aggregate price level causes consumer and investment spending to fall because consumer purchasing power decreases and money demand increases.

Explanation:

The Aggregate Demand (AD) curve is used to measure the impact that price level has on the expenditure in the economy.

The AD comprises of Investment, Consumption Spending, Government spending and Net Income.

When prices are high, households will spend less as they cannot afford to spend a lot which will reduce consumption spending.

Another result of a high price level is that people will have less money to save and so there will be a lower supply of loanable funds.

Both of these components of the AD reduce when prices increase and vice versa. This is why the AD is downward slopping.

The aggregate demand curve is downward sloping because an increase in the aggregate price level causes consumer and investment spending to fall.

The correct answer is c. An increase in the aggregate price level causes consumer and investment spending to fall because consumer purchasing power decreases and money demand increases.

The aggregate demand curve represents the relationship between the aggregate price level and the quantity of goods and services demanded in an economy. It is downward sloping because when the aggregate price level increases, consumer purchasing power decreases as the cost of goods and services rises. This leads to a decrease in consumer and investment spending, causing the aggregate demand curve to slope downwards.

For example, when the price of gasoline increases, individuals and businesses may cut back on their spending on other goods and services to compensate for the higher cost of fuel. This decrease in purchasing power and spending ultimately affects the overall demand in the economy.

Learn more about Aggregate demand curve here:

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If the tax elasticity of labor supply is 0.16, by what percentage will the quantity of labor supplied increase in response to Instructions: In part b, enter your response as a percentage rounded to one decimal place. a. A $500 per person income tax rebate check? A 4.5% increase A 2% increase A 1.5% increase No increase b. A reduction of 5 percent in marginal tax rates?

Answers

Answer:

If every work receives a tax rebate of $500 per person income tax the quantity of labor supplied will not increase because the rebate is a temporary

A 4.5% increase in marginal tax  = 0.16 * 4.5 = 0.72  = 0.7 ( decrease in quantity of labor )

A 2% increase in marginal tax

= 0.16 * 2 = 0.32 = 0.3 ( decrease in quantity of labor )

A 15% increase

= 0.16 * 15 = 2.4 ( decrease in quantity of labor )

No increase = 0.16 = 0.16 ( quantity of labor supplied remains unchanged )

A reduction of 5%

= 0.16 * 5 =  0.8 ( increase in quantity of labor )

Explanation:

Tax elasticity of labor supply = 0.16

What percentage will the quantity of labor supplied increase in response to

A) $500  per person income tax rebate

percentage change in quantity supplied = (tax elasticity of supply) * (percentage change in tax rate ) If every work receives a tax rebate of $500 per person income tax the quantity of labor supplied will not increase because the rebate is a temporary measure and does not have an effect the tax rate in the long run.

B) A 4.5% increase in marginal tax

change in the quantity of labor = tax elasticity * increase marginal tax

                                               0.16 * 4.5 = 0.72  = 0.7 ( decrease in quantity of labor )

A 2% increase in marginal tax

= 0.16 * 2 = 0.32 = 0.3 ( decrease in quantity of labor )

A 15% increase

= 0.16 * 15 = 2.4 ( decrease in quantity of labor )

No increase = 0.16 = 0.16 ( quantity of labor supplied remains unchanged )

A reduction of 5%

= 0.16 * 5 =  0.8 ( increase in quantity of labor )

Inventory Valuation under Variable CostingDuring the most recent year, Judson Company had the following data associated with the product it makes:

Units in beginning inventory 300
Units produced 15,000
Units sold ($300 per unit) 12,700
Variable costs per unit:
Direct materials $20
Direct labor $60
Variable overhead $12
Fixed costs:
Fixed overhead per unit produced $30
Fixed selling and administrative $140,000

Required:

1. How many units are in ending inventory?
$ _______ units
2. Using variable costing, calculate the per-unit product cost.
$_____________
3. What is the value of ending inventory under variable costing?
$___________

Answers

Answer:

1.  Ending inventory = Beginning inventory + Production - Sales

                            = 300 units + 15,000 units - 12,700 units

                            = 2,600 units  

2. Per unit Product Cost Using Variable Costing

                                  $

Direct material         20

Direct labor              60

Variable overhead   12

Product cost          92

3.  Value of ending inventory under variable costing

    =  2,600 units x $92

    = $239,200            

                                                                                                             

Explanation:

The units of ending inventory is calculated as beginning inventory plus  production minus sales.

Per unit product cost is the aggregate of variable cost per unit. This includes direct material cost, direct labour cost and variable overhead.

Value of ending inventory is the product of units of ending inventory and per unit product cost.

When a bill is paid in QuickBooks using the Pay Bills window, QuickBooks: Multiple Choice Increases the Accounts Payable account and increases the Checking account Increases an Expense account and increases the Accounts Payable account Decreases an Expense account and decreases the Checking account Decreases the Accounts Payable account and decreases the Checking account

Answers

Answer:

Decreases the Accounts Payable account and decreases the Checking account

Explanation:

In the case when the bill is paid in quick books by using the window of pay bills so the liabilities would be reduced also the liquid asset would be decreased

Since the liabilities is reduced i.e. account payable so automatically the checking account would also be reduced

hence, the last option is correct

The same is to be considered

Answer:

You would decrease the accounts payable (paying the bill relieves part of the balance in this account) and decreases the cash account (when you pay the bill, you use or reduce the cash)

Explanation:

see my answer for explanation

Which of the following best describes why the predicted incremental earnings arising from a given decision are not sufficient in and of themselves to determine whether that decision is worthwhile? A) They do not show how the firm's earnings are expected to change as the result of a particular decision.
B) They are not easily predicted from historical financial statements of a firm and its competitors.
C) These earnings are not actual cash flows.
D) They do not tell how the decision affects the firm's reported profits from an accounting perspective.

Answers

Answer and Explanation:

C) These earnings are not actual cash flows.  

Information related to Mingen back Company for 2015 is summarized below: Instructions: A. What amount of bad debt expense will Mingen back Company report if it uses the direct write-off method of accounting for bad debts? B. Assume that Mingen back Company estimates its bad debt expense to be 2% of credit sales. What amount of bad debt expense will Mingen back record if it has an Allowance for Doubtful Accounts credit balance of $4,000? C. Assume that Mingen back Company estimates its bad debt expense based on 6% of accounts receivable. What amount of bad debt expense will Mingen back record if it has an Allowance for Doubtful Accounts credit balance of $3,000? D. Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Mingen back record? E. What is the weakness of the direct write-off method of reporting bad debt expense?

Answers

Answer:

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Explanation:
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