Galaxy Co. distributes wireless routers to Internet service providers. Galaxy procures each router for $75 from its supplier and sells each router for $125. Monthly demand for the router is a normal random variable with a mean of 100 units and a standard deviation of 20 units. At the beginning of each month, Galaxy orders enough routers from its supplier to bring the inventory level up to 100 routers. If the monthly demand is less than 100, Galaxy pays $15 per router that remains in inventory at the end of the month. If the monthly demand exceeds 100, Galaxy sells only the 100 routers in stock. Galaxy assigns a shortage cost of $30 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation.

a. What is the average monthly profit resulting from its policy of stocking 100 routers at the beginning of each month?
b. What percentage of total demand is satisfied?

Answer:

Dr cash     $1,800,000

Cr Notes payable           $1,800,000

Interest accrual:

Dr Interest expense  $24,000

Cr Interest payable                  $24,000

Assets                             =liabilities                      +   shareholders'equity

+Cash $1,800,000          =+loan $1800,000

                                         =+liabilities $24,000    + -retained earnings  $2400

Explanation:

The issue of notes payable on November 1 2015 implies that there is cash inflow of $1,800,000 while current liabilities also increased by $1,800,000,as result cash is debited with the $1,800,000 and credit is posted notes payable.

On 31st December ,interest of two months would been incurred and should be accrued in the accounts with amount below:

$1,800,000*8%*2/12=$24,000

This should be debited to interest expense and credited to interest payable account

(a) On Nov 1

Cash

    To Note Payable

(Being the note issued is recorded)

(b) On Dec 31

Interest expense $24,000  (8% of $1,800,000 × 2 ÷ 12)

      To Interest payable $24,000

(Being interest expense is recorded)

Assets                 = Liabilities                   +         Equity

+ Cash           + Note payable ($1,800,000)

($1,800,000)  + Interest payable ($24,000)        - Interest expense ($24,000)

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Answer:

$300 i.e irrecoverable cost of old printer

Explanation:

Sunk costs refer to those costs incurred in the past which can no longer be recovered. Such costs are considered as irrelevant in decision making process since they have no current or future implications.

For example, research and development costs incurred by an enterprise in the past represent sunk costs since those costs can no longer be recovered and secondly have no current or future implications w.r.t investment decisions.

In the given case, the cost incurred in purchase of old printer is a sunk cost, incurred in the past. The irrecoverable part of the said cost i.e $350 less $50 i.e $300 represents sunk cost. Also, the expenditure on old printer's cartridges which costed $80 apiece would be regarded as a sunk cost.

This cost of $300 cannot be recovered and would be considered irrelevant w.r.t the decision of purchasing a new advanced printer.

Answer:

During 2013:

Total assets increased by $31,100.

Explanation:

Bledsoe Company received $28,000 cash from the issue of stock on January 1, 2013. Total assets increased by $28,000

Bledsoe earned $9,800 of revenue on account. Account receivable increased by $9,800. Total assets increased by $9,800

The company collected $8,600 cash from accounts receivable. Cash account increased by $8,600 and Account receivable decreased by $8,600. Total assets did not change.

The company paid $6,700 cash for operating expenses. Cash account decreased by $6,700. Total assets decreased by $6,700

During 2013:

Total assets increased = $28,000 + $9,800 - $6,700 = $31,100

Based on the provided information, during 2013, the total assets increased by $1,900. So, the correct option is B.

To determine the change in total assets, we can analyze the impact of various financial transactions. Bledsoe Company received $28,000 cash from the issuance of stock, which is considered an inflow of assets, increasing the total assets by $28,000.

Next, the company earned $9,800 of revenue on account, indicating an increase in accounts receivable (an asset) by $9,800. When the company collected $8,600 cash from accounts receivable, this increased the cash account by $8,600 but reduced accounts receivable by the same amount. Therefore, there was no net change in total assets from this transaction.

Finally, the company paid $6,700 cash for operating expenses, which decreased the cash account by $6,700. However, since this is an expense and not an asset, it does not directly impact the total assets.

Adding up the changes, $28,000 (issuance of stock) - $6,700 (operating expenses) = $21,300, and $21,300 + $9,800 (revenue) - $8,600 (collection of accounts receivable) = $1,900. Therefore, the total assets increased by $1,900 during 2013.

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Answer:

October 5 entries

Debit Accounts receivable  $6,650

Credit Sales Revenue                     $6,650

To record sales

Debit Cost of goods sold       $3,010

Credit Inventory            $3,010

To record the cost of sales

October 8 entries

Debit Sales return   $840

Credit Accounts receivable  $840

To record sales reversal due to sales return

Debit Inventory   $430

Credit Cost of goods sold   $430

Explanation:

The perpetual inventory system is the one that ensures that the book balance for inventory is adjusted for every purchase, sale or return of inventory.

When inventory is sold on account, the entries required are debit accounts receivable and credit revenue then Debit cost of goods sold and credit inventory.

Answer:

15.5%

Explanation:

The computation of the standard deviation of your portfolio is shown below:

Standard deviation of portfolio = weight of US Market portfolio ^2 × Standard deviation of US Market portfolio ^2 +  weight of Non US Market portfolio^ 2 × Standard deviation of Non US Market portfolio^2 + 2 ×  weight of US Market portfolio × weight of Non US Market portfolio × Standard deviation of US Market portfolio × Standard deviation of Non US Market portfolio × correlation

= [0.25^2 × 18.2^2 + 0.75^2 × 17.1^ 2 + 2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47]

= (0.0625 ×  331.24  + 0.5625  × 292.41  + 54.852525

= 20.7025  + 164.480625  + 54.852525

= 240.03565

Now take the square root of 240.03565 i.e 15.5%

We simply applied the above formula

b) The standard deviation of the portfolio is approximately 15.5%.

To find the standard deviation of a portfolio with multiple assets, you can use the formula for the standard deviation of a two-asset portfolio:

σp = √[(w₁² × σ₁²) + (w₂² × σ₂²) + (2 × w₁ × w₂ × σ₁ × σ₂ × ρ₁₂)]

Where: σp = standard deviation of the portfolio, w₁ and w₂ = weights of the assets in the portfolio, σ₁ and σ₂ = standard deviations of the assets, and ρ₁₂ = correlation between the assets.

Given: σ₁ (U.S.) = 18.2%, σ₂ (Non-U.S.) = 17.1%, ρ₁₂ = 0.47, w₁ = 0.25, w₂ = 0.75

Plugging in the values:

σp = √[(0.25² × 18.2²) + (0.75² × 17.1²) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]

= √[(0.0625 × 331.24) + (0.5625 × 292.41) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]

= √[20.7025 + 164.10525 + 54.78585]

= √[239.5936]

≈ 15.48%

Therefore, the standard deviation of the portfolio is approximately 15.5% (closest to option b).

Complete question

Assume the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the non-U.S. portion of the world portfolio is 17.1%, and the correlation between the U.S. and non-U.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the non-U.S. portfolio. What is the standard deviation of your portfolio?

a) 16.7%

b) 15.5%

c) 17.1%

d) 18.6%

Answer:

The variable manufacturing overhead efficiency variance is 9,000 Favorable.

Explanation:

According to the given data we have the following:

actual DL hours=3,700

standard hours= Actual tubs produced×Standard DL hours per tub

standard hours=1,200×5=6,000

standard rate=$4

Therefore, to calculate the variable manufacturing overhead efficiency variance, we would have to use the following formula:

Variable efficiency variance= (actual hrs - standard hrs)*standard rate  

Variable efficiency variance= (3,700 - 6,000)*4

Variable efficiency variance=-$9,000 Favorable

Answer:

I would choose A.

Explanation:

Savvy styles after getting a small business loan from a local bank should plan to repay the loan, including interest, over a predetermined amount of time. Therefore option a is correct.

An amortized loan can be defined as a type of loan that is with scheduled and periodic patents applied to the loan's both principal amount and interest accrued. Here the interest portion of the payments in this type of loan decreases while the principal portion increases.

At first, it pays the relevant interest expense for that particular period and then after that, the remainder of the payment is put toward curtailing the principal amount.

Generally, amortized loans are normally paid off over an extended period with equal amounts paid for each payment period. But there is another option, a person can pay more which further leads to reducing the principal amount they owe.

Types of amortized loans are home loans, auto loans, and personal loans for small projects.

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Final answer:

The net present value of Bruno's Lunch Counter's expansion project is calculated by finding the present value of expected operating cash flows, and then subtracting the required fixed asset investment and the net working capital. The discount rate used for the present value calculation is 12 percent, and the cash flows are expected to occur annually over a period of 5 years.

Explanation:

The question asks for the net present value (NPV) of an expansion project for Bruno's Lunch Counter, which requires calculating the present value of future operating cash flows and adjusting for the initial investment costs and the working capital required throughout the project. We will follow these steps:

The NPV formula we will apply is NPV = Σ (Ct / (1 + r)^t) - I - W, where Ct represents the cash flows in each period t, r is the discount rate (12%), I is the initial fixed asset investment, and W is the net working capital requirement.

Assuming that the operating cash flows occur at the end of each year for 5 years, and that the initial investment and working capital are required at the start, we use the present value formula for an annuity to compute the present value of the operating cash flows and then subtract the costs of investment and working capital to reach our final NPV.

Answer:

A) asymmetric information reduces the average quality of goods offered for sale.

Explanation:

The lemons model or problem refers to investing or purchase related problems due to the fact that investors/buyers have different information about securities/products than the sellers.

Since investors/buyers know that there are lemons (bad products) up for sale, but do not know which of them are actually bad, they will be willing to pay a lower price for high quality investments/goods than if only high quality investments/goods were sold without any lemons mixed with them.

Answer:

The correct answer is letter "D": difference between the expenses that the analyst expects the firm to generate and the required earnings of the firm.

Explanation:

Residual income represents the amount that is left after a company has paid all its capital costs. It is the result of acquiring assets to generate steady revenue over time. Real state, bonds, or stocks are examples of corporate and individual residual income.  

Therefore, we could say that residual income is calculated by subtracting the expenses of a firm from its expected earnings out of different sources.

Answer:

The budgeted floor purchases for October is 710 pounds and the cost of 710 pounds of flour is $2130

Explanation:

The flour needed to meet the October's production requirement for loaves is,

1400 * 1/2  =  700 pounds

The desired ending inventory of flour in October = 1500 * 1/2 * 0.2 = 150 pounds

The purchases for October should be enough to meet the desired ending inventory for October and the remaining Production requirement for October after adjusting for opening inventory .

Purchases = Closing Inventory + Production - Opening Inventory

Purchases = 150 + 700 - 140   =  710 pounds

The cost of purchases = 710 * 3  =  $2130

The planned flour purchases for October are 710 pounds and the cost for total flour is $2130.

Given that,

According to the scenario, computation of given data are as follows,

Flour needs for October production = 1,400 loaves [tex]\times[/tex] 1/2 pound

=  700 pounds

Flour needs for 20% of November production = (1,500 loaves [tex]\times[/tex] 1/2 pounds) [tex]\times[/tex] 20%

= 150 pounds

So, total purchase of flour in October will be as follows,

Purchases = 20% Inventory of Nov. + Current month production - Opening stock

By putting the value, we get,

Purchases = 150 Pounds + 700 pounds - 140 Pounds  

=  710 pounds

So, cost of 710 pound flour purchases = 710pounds [tex]\times[/tex] $3  

=  $2,130

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Answer:

The discount on the bonds issuance is $9,138.00

Explanation:

discount on bonds at issuance=bonds face value-bonds cash proceeds

bonds face value is $180,000

bonds cash proceeds =$170,862

Discount on bonds at issuance=$180,000-$170,862

Discount on bonds at issuance=$9,138.00  

The necessary journal entries to record the bonds issuance are follows:

Dr Cash                                $170,862.00

Dr discount on bonds issue $9,138.00

Cr Bonds payable                                   $180,000

The discount on the bonds would amortized over relevant years

Issuing bonds is termed as the way for companies to raise the funds for the company. It is referred to as the broad function between the investor and the firm or the corporate. The investor agrees to invest some amount of money in the firm with the guarantee to get a fixed interest in return.

The discount on issuance of the bonds is $9,138.00

Discount on bonds at issuance=bonds face value-bonds cash proceeds

bonds face value is $180,000

bonds cash proceeds =$170,862

[tex]\text{Discount on bonds at issuance}=\$180,000-\$170,862[/tex]

Discount on bonds at issuance=$9,138.00  

The necessary journal entries to record the issuance of the bonds have been attached below.

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Answer:

General Journal                                                          Debit                    Credit

Payroll Tax expense                                                   $ 5,994

         Social Security tax Payable                                                           $ 4,200

         Medicare Tax Payable                                                                   $ 1,050

         State Unemployment Tax Payable                                                 $  648

         Federal Unemployment Tax Payable                                               $  96

the attached image is additional, well formatted

The payroll tax expense is calculated by adding Social Security tax, Medicare tax, state unemployment tax, and federal unemployment tax. The total tax payable comes to $5,994 which is allocated among the four categories.

In order to record the payroll tax expense for the period, we would debit the payroll tax expense for the total amount of taxes withheld. This includes Social Security, Medicare, state unemployment tax, and federal unemployment tax.

The detailed calculation of the taxes are as follows:

Social Security Tax Payable: Already provided as $4,200

Medicare Tax Payable: Already provided as $1,050

State Unemployment Tax Payable: Calculated as $12,000 * 5.4% = $648

Federal Unemployment Tax Payable: Calculated as $12,000 * 0.8% = $96

So the journal entry to record the payroll tax expense is:

Payroll Tax Expense $5,994

Social Security Tax Payable $4,200

Medicare Tax Payable $1,050

State Unemployment Tax Payable $648

Federal Unemployment Tax Payable $96

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Answer:

The answer is:

For italy: $35 billion

For Greece: -$40 billion

Explanation:

Injection into the economy = $70 billion.

Government spending multiplier is 1.5.

MPC = $70billion x 1.5

=$105 billion.

Change in Italy's real GDP due to the transfer = $105 billion - $70 billion

= $35 billion.

Greek Government.

Multiplier effect = 1 ÷ (1-MPC)

1 ÷ (1-0.6)

1÷ 0.4

-2.5.

It is negative because it is a reduction in government spending.

Therefore, the final change in real GDP as a result of this decreased spending is

-2.5 x $16 billion

= -$40 billion

Answer:

1 person.

Explanation:

For one person;

Wage =$27

Total Cost of units = 8×5 = $40

Per unit profit = (40-27)/8 = $1.625 per unit

For two people;

Wage =$27 × 2 = $54

Total Cost of units = 15×5 = $75

Per unit profit = (75-54)/15 = $1.4 per unit

For three people;

Wage =$27 × 3 = $81

Total Cost of units = 18×5 = $90

Per unit profit = (90-81)/18 = $0.5 per unit

For four people;

Wage =$27 × 4 = $108

Total Cost of units = 20×5 = $100

Per unit profit = (100-108)/20 = -$0.4 per unit

Therefore, for the four cases the maximum profit per unit is $1.625, with one person. And since there is no production limits (minimum). So, the firm should hire 1 person.

Answer:

$489,000

Explanation:

Martinez Company

Computation of net cash flow from operating activities for 2010

Details                                                           Amount ($)

Net income                                                     305,900

Non-cash expenses adjustment:

Plant depreciation                                           120,200

Patent amortization                                          39,400

Loss on sale of plant assets                           23,500  

Net cash flow from operating activities     489,000  

Answer:

The expected rate of return is 8.65%

Explanation:

The expected return on a stock can be calculated by multiplying the return in each scenario by the probability of that scenario. This will provide the expected value of the return based on all these scenarios. Thus, the rate of return is,

Rate of return = rA * pA + rB * pB + rC * pC

Where,

The probability of normal state is = 1 - 0.45 - 0.05  =  0.5

Rate of return = 0.13 * 0.45 + 0.06 * 0.5  + (-0.04) * 0.05

Rate of return = 0.0865 or 8.65%

Answer:

Purchases= $3,200

Explanation:

Giving the following information:

The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500.

To calculate the number of purchases, we need to use the following formula:

Purchases= expense of the year + ending balance - beginning balance

Purchases= 3,500 + 500 - 800= $3,200

Answer:

the equivalent units of production for conversion costs in the Assembly Department for the month are 101,900

Explanation:

Step 1 Calculate the Units Completed and Transferred to Finished Goods

Units Completed and Transferred to Finished Goods =  units in beginning work-in-process inventory+ units were transferred in from the prior department-units in the ending work-in-process inventory

therefore, Units Completed and Transferred to Finished Goods = 8,000+95,000-11,000 = 92,000

Step 2 Calculate the equivalent units of production for conversion costs

Note : work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs

Work-in-process inventory (11,000× 90%)                         =   9,900

Units Completed and Transferred Out (92,000× 100%)  = 92,000

Total equivalent units of production                                 = 101,900

Answer:

Equivalent unit of production = 101,900 units

Explanation:

Calculating the unit transfer to next department using the formula;

Unit transfer to next department = unit in beginning work in progress+unit started into production -unit in ending work in progress

Unit transfer to next department  = 8000+95000-11000

                                                          = 92,000

Calculating the conversion unit, we have;

Conversion = 11,000*90%

                     = 9900

Therefore,

Equivalent unit of production = Unit transfer to next department + Conversion

                                               = 92,000+9900

                                               = 101,900 units

Equivalent unit of production = 101,900 units

Answer:

The rules used to calculate brad's ending basis in his partnership interest is called Ordering rules., and his gain for the tax year report is $ 5,000. the loss for $10,000 can be suspended or put on hold.

Explanation:

From the above question, we resolve the following.

Question 1: What rules are used to calculate Brad’s ending basis in his partnership interest

Explanation: The rules used here is called the Ordering rules. or refers to reduce basis by distributions; increase basis by income items and contributions; and then losses deducted to the extent of remaining basis

Question 2: How much gain or loss will Brad report for the tax year

Explanation:  For he tax year report the gain is $ 5,000 gain

Question 3: Will the deduction for the $10,000 loss be suspended

Explanation: Yes loss of $ 10,000 is to be suspended because losses cannot be deductible to pay off shareholders.

Question 4: Could any planning opportunities be used to minimize any negative tax ramifications of the distribution

Explanation: Yes there are planning opportunities to minimize negative tax ramifications of the distribution are as under tax diversification: which means diversifying investments in different types of accounts can diversify tax risk and create more flexibility to optimally select the most tax efficient method of liquidating assets.

Answer:

The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.

Explanation:

Cash flow = Opportunity costs + cost + upgrdation

                 = $11.7 million + $22.9 million + $1,040,000

                 = $35,640,000

Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.

Answer:

127.45%

Explanation:

Data provided

Total overhead cost = $1,300,000

Total direct material cost = $1,020,000

The calculation of predetermined overhead rate is given below:-

Predetermined Overhead rate = Total overhead cost ÷ Total direct material cost × 100

= $1,300,000 ÷ $1,020,000 × 100

= 127.45%

So, for calculating the predetermined overhead rate we simply applied the above formula.

Answer:

Effect on income= $2 increase per unit

Explanation:

Giving the following information:

A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products.

We need to calculate the effect on income using the following formula:

Effect on income= sales - unitary variable costs

Effect on income= 180 - (160 + 180*0.1)= $2 increase per unit

Answer:

Value Based pricing.

Explanation:

Value based pricing is something which IKEA and The Home Depot are know for using because this is a way of pricing through which prices are set based on the customer's perception and what he/she thinks of it in his mind. This is also know as customer based/focused pricing because they sell items on prices which customer's believe how exactly it should be.

Thankyou.

Goodluck.

IKEA and The Home Depot employ business strategies that offer high-quality products and customer service at low prices, a principle similar to Walmart's 'everyday low prices.' IKEa uses flat organizational structures to encourage employee engagement, while Amazon's efficient production and cost models allow for competitive pricing.

Stores like IKEA and The Home Depot are known for their successful business strategies which encompass providing high-quality products and adequate customer services while maintaining reasonably low prices. The philosophy behind this approach is akin to the strategy used by Walmart, known as 'everyday low prices.' By targeting a market with elastic demand, these companies find that a slight decrease in prices leads to a significant increase in sales volume, often resulting in overall higher profitability.

IKEA, specifically, employs flat organizational structures within its stores to enhance employee involvement and instill a sense of ownership among its staff. This management strategy contributes to the company's ability to maintain cost-effective operations while fostering a workplace culture that is conducive to delivering value to its customers.

Moreover, companies like Amazon have executed similar principles through efficient production models and cost structures, enabling them to offer lower prices than competitors even when including shipping costs. These business practices highlight the importance of operational excellence in attracting and retaining customers who prioritize cost, convenience, and quality when making purchasing decisions.

Answer:

D. 10.34

Explanation:

The computation of inventory turnover ratio is shown below:-

For computing the inventory turnover ratio first we need to find out the average inventory

Average inventory = (Opening stock + Closing stock) ÷ 2

= ($14,760 + $14,001) ÷ 2

= 14380.50

Inventory turnover ratio = Cost of goods sold ÷ Average inventory

= $148,669 ÷ 14380.50

= 10.34

Answer:

Landing cost = 56.49 dollars per barrel.

Explanation:

Buying Cost of oil barrel = 1,800 Rubles, which is equal to 27.50 USD per barrel.

Shipping Cost = 20 Krones, which is equal to 2.35 USD per barrel.

Refining Cost = 20 Euros, which is equal to 22.82 USD per barrel.

Transportation Cost = 200 Philippine peso, which is equal to 3.82 USD per barrel.

Therefore, to find landing cost of the above mentioned transaction = 27.50 + 2.35 + 22.82 + 3.82 = 56.49 USD per barrel.

Answer:

4 houses per month.

Explanation:

Note: See the attached file for the calculation.

Efficient scale of production is can be described as the number of units of production where average total cost (ATC) of production is lowest.

From the attached file, the ATC of $70 is the lowest at 4 houses per month and 4 houses per month is therefore the efficient scale.

Answer:Kindly check explanation

Explanation:

2016 volume = 7520000 ÷ 8 = 940,000

Plan A volume = 940,000 - (0.1×940000) = 846000

Plan A selling price = $8.40

Plan B selling price = $(8 - 0.5) = $7.5

Plan B volume = $940,000 + 115,000 = 1,055,000

SALES BUDGET ;

—-------------------------- Plan A. PlanB

Expected unit sale-846,000; 1055000

Unit selling price - $8.40. ; $7.50

Total sales - $7,106,400; $7,912,500

PRODUCTION BUDGET ;

------------------------------- PlanA. PlanB

Expected unit sales- 846000. 1055000

Add:

ending inventory - 42,300. 66,000

Total required unit - 888300. 1,121,000

Less:

Beg. finished goods - 45000. 45000

Tot. required goods - 843,300. 1,076,000

C.

Variable cost = $(1.80+1.40+1.20) = $4.40

Variable cost(PlanA) = $4.40 × 843300 = $3,710,520

Variable cost(PlanB) = $4.40 × 1076000 = $4,734,400

--------------------------------- PlanA. PlanB

Variable cost 3,710,520. 4,734,400

Fixed cost 1553000. 1553000

Total cost(c) 5,263,520. 6,287,400

Total unit(u). 843,300. 1,076,000

Unit cost (c/u) $6.24. $5.84

D.) GROSS PROFIT

Cost of goods sold(PlanA) = $6.24 × 846000 = $5,279,040

Cost of goods sold(PlanB) = $5.84 × 1055000 = $6,161,200

--------------------------------- PlanA. PlanB

SALES. $7,106,400 $7,912,500

Cost of goods sold. $5,279,040. $6,161,200

Gross profit. $1,827,360 $1,751,300

E.) Plan A should be accepted due to it's higher gross profit margin

Answer:

EOQ= 300 units

Annual ordering cost= $3750

Annual holding cost =$3750

Re-order point =100 units

Explanation:

The Economic Order Quantity (EOQ) is the order size that minimizes the balance of ordering cost and holding cost. At the EOQ, the carrying cost is equal to the holding cost.

It is computed using he formulae below

EOQ = √ (2× Co× D)/Ch

EOQ = √ (2× 75× 15,000)/25

EOQ = 300 units

Annual holding cost

= EOQ/2 × holding cost per unit

= 300/2 ×  $25

=$3750

Annual ordering cost

= Annul demand/EOQ × ordering cost per order

=( 15,000/300)× $75

= $3750

Re-order Point

Maximum consumption × maximum lead time

=( 15,000/300)× 2 = 100 units