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Assume you are working for a tech company. Every month, your company is selling 55...

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Accounting

Assume you are working for a tech company. Every month, your company is selling 55 laptops, 65 smartphones, 35 TVs and 25 iPads. Common order cost is $505. Product-specific order costs are $67, $42, $60 and $35 for laptop, smartphone, TV, and iPad, respectively. Holding cost as a percentage of unit costs are 25%, 20%, and 15% for laptop, smartphone, and TV, respectively. Holding cost for iPad is $25 per iPad per year. Unit costs are $40, $105, and $335 for laptop, smartphone, and TV, respectively.

  1. Assume you are currently ordering each product monthly and separately. How much the total annual fixed costs will be changed if you start making joint orders for these four products?
  2. Assume you are currently ordering each product separately and in optimal quantity. How much the total annual holding costs will be changed if you start making joint orders for these four products?

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