5. Genesis Company is a wholesaler. It purchases 60.000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma. Example: 10,000 Required: Previously, the company had been purchasing 5,000 units of product X per order: a. What is the ordering cost per year under the previous policy? b. The annual carrying cost? c. How much money does the company save over the policy of purchasing 5,000 units per order using the EOQ policy?

5. Genesis Company is a wholesaler. It purchases 60.000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma. Example: 10,000 Required: Previously, the company had been purchasing 5,000 units of product X per order: a. What is the ordering cost per year under the previous policy? b. The annual carrying cost? c. How much money does the company save over the policy of purchasing 5,000 units per order using the EOQ policy?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

5. Genesis Company is a wholesaler. It purchases 60.000 units of Product X per month for sale to
retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is
P4.
Note: Kindly input your answer with comma.
Example: 10,000
Required:
Previously, the company had been purchasing 5,000 units of product X per order:
a. What is the ordering cost per year under the previous policy?
b. The annual carrying cost?
c. How much money does the company save over the policy of purchasing 5,000 units per order using
the EOQ policy?

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