SRI International developed Values and Lifestyles (VALS). Such a consumer profile would be helpful for which type of segmentatio
1 answer:
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Answer:
<u>Jan 1st, 2021 entry:</u>
Equipment 746,168 debit
Lease Liability 723,668 credit
Cash 22,500 credit
<u>April 1st, 2021 entry:</u>
Interest expense 7,537 debit
Lease Liability 15,263 debit
Cash 22,800 credit
Explanation:
We will assume a 750,000 sales revenue per quarter. As this was their historical and expected value:
750,000 x 3% = 22,500 per quarter
Now, we solve for the present value of the lease payment:
C 22,500
time 40 (10 years x 4 quarter per year)
rate 0.01 (4% annual / 4 quarters)
PV $746,168.2419
we subtract the first payment of 22,500
lease liability reocrded in the enrty: 723.668
As lease sales were 760,000
lease payment: 760,000 x 3% = 22,800
less expected of 22,500 = 300 additional interest expense
interest expense: 723,668 x 0.01 = 7,237 + 300 = 7,537
amortization on lease liability: 22,800 -7,537 = 15,263
Answer:
a. 49.50 units
b. The order quantity should not be changed
Explanation:
a. The computation of the ordering cost is shown below:
Economic order quantity =
where,
Carrying cost = $11 × 40% = $4.4
And, the other items values would remain the same
Now put these values to the above formula
So, the units would equal to
70 =
= 49.50 units
b. Since we see that the ordering cost is less than the economic order quantity, the order quantity should not be changed as it leads to increase in the total inventory cost