Question
A company requires 1,000 units of material X per month. The cost per order is $30 regardless of the size of the order. The holding
A company requires 1,000 units of material X per month. The cost per order is $30 regardless of the size of the order. The holding costs are $2.88 per unit pa.
Required:
A. Investigate the total cost of buying the material in quantities of 400, 500, or 600 units at one time. What is the cheapest option?
B. Use EOQ formula to prove your answer is correct.
C. Give five assumptions of EOQ
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Cost Accounting
Authors: William K. Carter
14th edition
759338094, 978-0759338098
