The HA H.A.L.Computer

question 119

Short Answer

The H.A.L.Computer Store sells a printer for $400.Demand for this is constant during the year, and annual demand is forecasted to be 1350 units.The holding cost is $20 per unit per year, while the cost of ordering is $90 per order.Currently, the company is ordering 12 times per year (92 units each time).There are 270 working days per year and the lead-time is 8 days.What should be the reorder point?

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Definitions:

Adjusting Entry

An update to the books of accounts to allocate incomes and expenses to the appropriate accounting period.

Fiscal Period

Refers to any period used for accounting purposes, typically a year, which can either align with the calendar year or be a different 12-month period.

Insurance

A financial product sold by insurance companies to safeguard against financial losses from specific risks, such as accidents, theft, or natural disasters.

Adjusting Entry

An accounting entry made in the journals at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.