Question
The john equipment company estimates its carrying cost at 15% and its ordering costs at $90 per order. The estimated annual requiment is 78,000 units
The john equipment company estimates its carrying cost at 15% and its ordering costs at $90 per order. The estimated annual requiment is 78,000 units at a price of $4 per unit.
Required:
(i) Determine the economic order quantity
(ii) No. of orders to be placed in a year
(iii) Determine the total relevant costs
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Step: 1
To determine the Economic Order Quantity EOQ we can use the formula EOQ 2 D S H Where D Annual deman...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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Cost Accounting
Authors: William K. Carter
14th edition
759338094, 978-0759338098
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