Scenario 11.1 - Bubble and Squeak

question 46

Multiple Choice

Scenario 11.1 - Bubble and Squeak
The rising popularity of bubble and squeak as a breakfast item on the menu has resulted in a steady demand for peas.Over the course of the past week,457 patrons have ordered the hearty breakfast and each serving contains a half cup of English peas.It costs two cents to hold a half cup of peas in inventory for a year and $3 to place an order (remember they come all the way from England!) .It takes two weeks to ship a container from England loaded with peas.
-What is the cost of the inventory policy (excluding cost of goods) if the diner orders at the economic order quantity?

• A)$53.40
• B)$106.80
• C)$26.70
• D)$80.10

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Definitions:

Additional Investments

Extra funds put into a business by its owners or shareholders, beyond the initial investment, to support operations, growth, or expansion.

Net Income

The total earnings of a company after subtracting all expenses from revenue, including taxes and operating expenses.

Capital Deficiency

A situation where a company's total capital is less than its total liabilities, indicating financial distress.

Voluntary Act

An action undertaken by an individual or entity out of free will without coercive influences.