Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alfred operates a factory that manufactures bread and cakes. One of the major raw materials used is organic maize, which he buys for $5 per

Alfred operates a factory that manufactures bread and cakes. One of the major raw materials used is organic maize, which he buys for $5 per kilogram. The factory operates for 350 days each year. The following information has been provided:

Annual usage of maize

80 000 kilograms

Average time between placing and receiving order

4 days

Estimated cost of ordering and receiving inventory (per order)

$8

Estimated annual cost of carrying a kilogram of maize in stock

$0.50

(a)economic order quantity (EOQ) (7 marks)

(b)number of orders per year. (3 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Accounting An Integrated Approach

Authors: Penne Ainsworth, Dan Deines

5th Edition

0073527009, 9780073527000

More Books

Students also viewed these Accounting questions