Sarah's Computer City Sells 5,000 Boxes of CD- RW Compact

question 43

Multiple Choice

Sarah's Computer City sells 5,000 boxes of CD- RW compact discs per year.She determined that she pays $50 to process an order for discs.Her purchase price is $6 for each box of discs and she has determined that storage costs for one year are 25 percent of the purchase price.Sarah's vendor said that if she purchased 1,000 boxes at a time,she would receive a 10 percent discount.What is her total cost if she orders her Economic Order Quantity without the discount if the formula for total cost is TC = DP + ^QIP + ^DS ?
2 Q

• A)$30,866
• B)$28,000
• C)$27,925
• D)$27,866

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Definitions:

IAS 34

refers to the International Accounting Standard 34 "Interim Financial Reporting" that outlines how to report financial figures for interim periods.

Provision

A liability of uncertain timing or amount, recognized when an entity has a legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation.

Discreet Approach

A method or strategy that is conducted with subtlety and reserve, often to avoid attracting undue attention or to handle sensitive matters.

Integral Approach

An accounting method that combines the financial statements of a parent company and its subsidiaries into one comprehensive set of statements.