Ruby Company sells car stereo systems. Units are purchased from a manufacturer in China and shipped to Ruby. Management is expecting an annual demand of 7000 units with a purchase price of $400. Other costs associated with ordering and maintaining an inventory of these stereo systems are shown below. The ordering costs incurred in the purchase order department for placing and processing orders for the past three years are shown below. Orders placed and processed Total processing costs 46 $49,220 2 132 49,900 3 206 50,820 year 1 Management expects these ordering costs to increase by 25 per cent over the amounts and rates experienced in the last three years. Each order is inspected by NZ customs officers. A fee of $134.40 is charged. A clerk in the receiving department receives, inspects and secures the stereos as they arrive from the manufacturer. The activity requires 3 hours per order received. This clerk has no other responsibilities and is paid at the rate of $68 per hour. Related variable overheads in this department are applied at a rate of $18 per hour. Additional warehouse space will have to be rented to store the new stereo systems. Space can be rented as needed in a warehouse at an estimated cost of $7,000 per year plus $12.50 per stereo. Breakage cost is estimated to average $10 per stereo, Insurance on the inventory costs $3.00 per stereo. Other carrying costs amount to $19.00 per stereo Ruby works 50 weeks each year with five working days a week. Five working days are required from the time the order is placed with the supplier until it is received. + Required: Question 3.2 Assuming all costs other than the order costs remain the same, calculate the following amounts for year 4: (1) Economic order quantity (EOQ), (ii) Reorder point in units (ROP) and (ii) Minimum annual relevant cost of ordering and carrying at the Eog level. (6 marks) Your Answer: 0 Economic order quantity (EOQ) Kii) Reorder point in units (ROP) kiii) Minimum annual relevant cost of ordering and carrying at the EOQ level Show vour workinas here linsert rows/columns and expand the space as required)