Answer to Question #205487 in Management for Sesona Nontshokwen

Question

Do the following Gross to Net Calculations:

• The Net Requirements for fan motors   [3 Marks]

In composing its MRP plan, suppose the Operations Management (OM) receives an order for 1 000, 3-blade fans. A fan is composed of 4 major components, namely:

• A fan motor
• A pedestal
• A 4 – switch assembly and 2m electric cord.
• A safety fan guard

OM has the following items in stock: Fully assemble fans: 120;, Fan motors: 90;, 4–switch assemblies: 70;, Pedestals: 80;, Safety fan guards: 150;, and Electric cords 240m

Answer 1

Total cost:

90+70+120+80+150+240= 750

750*3=2250

Price=2250      VAT Rate=20% Standard         

Results

Less VAT:

375.00        

Net Price:

1,875.00

Add VAT:

450

Gross Price:

2,700.00