Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.

A) $1936.60
B) $2004.60
C) $1972.60
D) $1864.60

Question

Hazyl Jonas · Accepted Answer

Final Answer : C, Explanation :   The in-transit inventory cost can be calculated using the formula:   In-transit inventory cost = Annual demand × Transit time 365 × Cost per unit × Holding cost rate  	ext{In-transit inventory cost} = \frac{	ext{Annual demand} 	imes 	ext{Transit time}}{365} 	imes 	ext{Cost per unit} 	imes 	ext{Holding cost rate}  In-transit inventory cost = 365 Annual demand × Transit time ​ × Cost per unit × Holding cost rate   Given that the Onion Shack purchases 240,000 bags of onions per year, the transit time for Anita Enterprises is 3 days, the cost per bag is $100, and the holding cost rate is 15%, the calculation is:   In-transit inventory cost = 240 , 000 × 3 365 × 100 × 0.15 = $ 2 , 972.60  	ext{In-transit inventory cost} = \frac{240,000 	imes 3}{365} 	imes 100 	imes 0.15 = \$2,972.60  In-transit inventory cost = 365 240 , 000 × 3 ​ × 100 × 0.15 = $2 , 972.60

Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.

A) $1936.60
B) $2004.60
C) $1972.60
D) $1864.60

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Learning Objectives

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Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.A) $1936.60B) $2004.60C) $1972.60D) $1864.60

Definitions

Learning Objectives

Learning Objectives

Related questions

Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.

A) $1936.60
B) $2004.60
C) $1972.60
D) $1864.60