Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 220 per week, at $40 per lens. Blitz covers all shipping costs. Vision earns 22% on its cash investments. The purchase-order lead time is 3.0 weeks. Vision sells 315 lenses per week. The following data are available:
What is the reorder point?
Definitions:
Equity Method
An accounting technique used by firms to assess the profits earned through their investments in other companies by recognizing their share of the earnings.
Cost Method
An accounting method used to record investments at their original purchase cost.
Consolidated Net Income
Consolidated net income refers to the total earnings of a parent company and its subsidiaries after taxes and expenses, adjusted for minority interests.
Consolidated Retained Earnings
The cumulative amount of net income earned by a parent company and its subsidiaries, less any dividends paid, as presented in consolidated financial statements.
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