Economic order quantity, order cost; carrying cost LO₁ Starr Company predicts that it will use 360,000 units of material during the year. The material is expected to cost $5 per unit. Starr anticipates that it will cost $72 to place each order. The annual carrying cost is $4 per unit.

a. Determine the most economical order quantity by using the EOQ formula.

b. Determine the total cost of ordering and carrying at the EOQ point.