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Task $1$

Jackson, Inc., manufactures and sells sunglasses and other shaded glass products and

purchases the shaded sheets from a supplier. Minimal inventory is kept on site that is

managed using the economic order quantity model. Based on the information provided in

the exhibits, for each question below, enter the appropriate amount in the associated cell.

For items B$2-$B$7,$ round all amounts to the nearest whole number. For items B$8-$B$10,$ round

all amounts to the nearest hundredth.

Email from Accounting Manager

To: Minerva Smith, Accounting Associate

From: Ronald Butterscotch, Accounting Manager

RE: Inventory Costs

Hi Minerva,

We want to ensure that we stay within the parameters noted by the CFO for our liquidity risk, which we partially manage

through our inventory policies.

We purchase the shaded sheets for our glasses from a wholesaler and use them to manufacture our products before

selling them to customers. Inventory costs therefore consist only of purchase costs, fixed ordering costs per order, and

carrying costs. We incur no stockout costs.

We signed a contract with the wholesaler that fixes the purchase cost per shaded sheet at $$50$ for Years $1-3.$ The carrying

cost averages $$8$ per sheet, and the ordering cost per order is $$45,000.$ Our annual demand is expected to be $150,000$

sheets.

Financial Information$/$Ratio

Note: The difference between the current and the quick ratio is due to inventory only.