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Mangerial accounting A pottery company required 3500Kgs of clay per annum to produce small garden pots and the cost per order was $100 and the
Mangerial accounting A pottery company required 3500Kgs of clay per annum to produce small garden pots and the cost per order was $100 and the carrying cost was $0.80 per tonne. Usage varied between 100Kgs and 65Kgs per week and there is a 3 -week lead time and clay is always supplied in 20Kg bags so all amounts (for ordering purposes) should be rounded up to the next whole 20Kg. (Assume 50 weeks per annum - NOT 52) Required: a) What would be the economic order quantity of clay (how many Kgs at a time should be ordered)? b) What would be the reorder point of their clay stocks? (in Kgs) c) How many times would this company need to order clay each year
Mangerial accounting
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