Aberwald Corporation Expects to Order 126,000 Memory Chips for Inventory

question 14

Multiple Choice

Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firm's inventory carrying costs is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-How many orders should Aberwald place during the year?

• A) 12
• B) 25
• C) 30
• D) 40

Evaluate investments based on opportunity costs and alternative investments.

Determine the financial impact of replacing or disposing of equipment.

Grasp the basic principles of relevant revenues and costs in decision making.

Understand the implications of accepting special orders on company operations.

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Definitions:

Germs And Disease

The study or consideration of microorganisms that can cause illness or disease in humans, animals, or plants.

Medicine As An Institution

The structured and established practice of diagnosing, treating, and preventing illness through the application of medical and health sciences.

Stress

A physical or psychological response to external pressures or threats, which can affect health and well-being.