Question
Mr. Combate uses 100,000 units of Material X Annually in its production. The ordering cost consists of $1,000 for placing a long-distance call to make
Mr. Combate uses 100,000 units of Material X Annually in its production. The ordering cost consists of $1,000 for placing a long-distance call to make the order and $4,000 for delivering the order to the company warehouse. Each material costs $10,000 and the carrying costs are estimated at 15.625% of the inventory cost.
Questions:
- What is the Economic Order Quantity (EOQ)?
- What is the total carrying cost?
- What is the total ordering cost?
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Cost Accounting
Authors: William K. Carter
14th edition
759338094, 978-0759338098
