Question: Stephanie claims increasing sales will reduce the COGS on a PER UNIT basis. Wilson s EOQ includes some of the logistics costs in COGS [

Stephanie claims increasing sales will reduce the COGS on a PER UNIT basis. Wilsons
EOQ includes some of the logistics costs in COGS [assume annual demand is 1,000
units per year, ordering cost is $55 per order, annual inventory carrying cost is 34.8%,
unit purchase price is $48, and sales increases by 24% annually]. Show how increasing
sales for an item will lower the COGS on a PER UNIT basis.

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