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Rudi (Pty) Ltd is a car manufacturer. In order to produce cars, the entity purchases car components such as tyres The following information relates to
Rudi (Pty) Ltd is a car manufacturer. In order to produce cars, the entity purchases car components such as tyres
The following information relates to the purchasing of tyres: Rudi (Pty) Ltd requires 88 000 tyres annually.
The entity incurs an ordering cost of R15 per order. The annual variable warehouse storage cost is R5 per tyre.
The annual theft and fire insurance cost is R0.90 per tyre
The opportunity cost of lost interest is R20.00 per tyre.
2.1.Calculate the EOQ (Economic Order Quantity).
2.2. Using the EOQ calculated in question 2.1, calculate the total cost of Rudi (Pty) Ltd.'s inventory policy (i.e., the annual ordering cost and the annual holding cost).
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Auditing and Assurance Services Understanding the Integrated Audit
Authors: Karen L. Hooks
1st edition
471726346, 978-0471726340
