MAS Abitiago
MAS Abitiago
PREWEEK MATERIALS
37. Gleim Company, which manufactures a line of appliances, has an annual demand for its HD washing
machine estimated at 7,500 units. The annual cost of carrying one unit of inventory is P200, and the
cost to initiate a production run is P5,000.There are no HD washing machine on hand, and Gleim has
scheduled 5 equal production runs of HD washing machines for the coming year. Gleim has 250
business days per year. Assume that sales occur uniformly throughout the year and that production
is instantaneous.
If Gleim does not maintain a safety stock, the estimated total carrying costs and total set-up costs for
the coming year are:
A. B. C. D.
Carrying costs P150,000 P150,000 P300,000 P300,000
Set-up costs P 5,000 P 25,000 P 5,000 P 25,000
38. RAGNAROK CORP. regularly pays its accounts payable on the twentieth day on the term 2/10, net 30.
What is the annual cost of not availing of the discount? Use 360 days a year.
A. 2.04% C. 36.73%
[(2/98) x (360/10)] = 73.44%
B. 30.02% D. 73.44% 20th - 10 discount = 10 napakinabangan cash
39. A stock has an expected return of 12.25 percent. The beta of the stock is 1.15 and the risk-free rate
is 5 percent. What is the market risk premium?
A. 1.30% C. 6.50%
B. 6.30% D. 7.25%
40. Lake Corporation manufactures specialty components for the electronics industry in a highly labor
intensive environment. Are Electronics has asked Lake to bid on a component that Lake made for Arc
last month. The previous order was for 80 units and required 120 hours of direct labor to
manufacture. Arc would now like 240 additional components. Lake experiences an 80% learning
curve on all of its jobs. The number of direct labor hours needed for Lake to complete the 240
additional components is
A. 187.2 C. 307.2
B. 256.0 D. 360.0
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