Olive Corporation buys a material for P20 per unit. Sixteen thousand parts a year are needed. Carrying costs is P3.00 per unit and the ordering cost is P15.

Required:

1. Compute the economic order quantity
2. Prepare a tabular analysis to compute the total costs assuming the following order sizes: 100 units, 200 units, 400 units, 1,600 units and 6,400 units. The table should have the following columns: order size, number of orders, cost per order, total ordering costs, average inventory, carrying cost per unit, total carrying costs, and total costs.

Llanera Company made the following material purchases and issues during October:

October 1 Balance on hand, 1,000 units at P4.00 each

3 Issued 250 units

5 Received 500 units at P4.50 each

6 Issued 150 units

10 Issued 110 units

11 Factory returned 10 units to the store room that were issued on the 10th

15 Received 500 units at P5.00 each

20 Returned 300 units to vendor from October 15th purchase

26 Issued 100 units

Required: Compute the total cost of materials used and cost of ending inventory, using:

1. First-in, First out
2. Average