A company has an annual demand for inventory of 2,500 units. The cost of placing an order is $60, and the annual holding cost per unit is $3. What is the economic order quantity (EOQ) for this company? a. 200 units b. 316.23 units c. 447 units d. 500 units

A company has an annual demand for inventory of 2,500 units. The cost of placing an order is $60, and the annual holding cost per unit is $3. What is the economic order quantity (EOQ) for this company? a. 200 units b. 316.23 units c. 447 units d. 500 units

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...

See similar textbooks

Related questions

Q: Flow of Production Units Units to be accounted for: Beginning WIP inventory Units started this…

A: Sections of the Template & How to Complete Them (FIFO) 1. Flow of Production UnitsThis tracks…

Q: Solve this accounting question with proper step.

A: Sales: $216,000Units Sold: 18,000Selling Price per Unit: $216,000 / 18,000 = $12Direct Materials and…

Q: Solve this

A: Provided Data:Equity = $198,300Total Liabilities = $16,700Step 1: Key Definitions Definition of…

Q: I need guidance with this financial accounting problem using the right financial principles.

A: Step 1: Definition of EBIT (Earnings Before Interest and Taxes)EBIT is a measure of a company's…

Q: Financial accounting question

A: To calculate the gain or loss on the sale of the machine, follow these steps:Calculate the book…

Q: Please provide the answer to this financial accounting question with proper steps.

A: Concept of AssetsAssets are resources owned by a business that have economic value and are expected…

Q: I need help with this general accounting question using standard accounting techniques.

A: Step 1: Definition of Cost of Goods SoldCost of goods sold (COGS) represents the direct costs…

Q: Could you help me solve this financial accounting question using appropriate calculation techniques?

A: Concept of Accounting Equation:The accounting equation is the foundation of a company's balance…

Q: Solve qn no. 9 solve it plz

A: We have given, Material Cost = ₹40 per unitLabor Cost = ₹25 per unit We know that, Prime Cost =…

Q: Please explain the correct approach for solving this financial accounting question.

A: Step 1: Define Return on Common Stockholders' Equity (ROE)Return on common stockholders' equity…

Q: Compute the amount of the work in process inventory on hand at year end.

A: Provided Data:Beginning Work in Process Inventory = $51,000Direct Materials Used = $298,000Direct…

Q: Show work clearly.

A: From the question: Estimated overhead costs: $276,660Estimated machine hours: 125,300 hoursWe need…

Q: Do fast answer of this general accounting question

A: Step 1: Definition of Net IncomeNet Income is the amount of profit a company earns during a period…

Q: What is the estimated ending inventory on May 31 ?

A: Provided Data:Beginning Inventory (May 1) = $45,980Purchases during May = $93,900Sales =…

Q: None

A: Given Information:Bond Price = $1,200Number of Shares upon Conversion = 40 Formula: Breakeven Stock…

Q: Accounting solution please

A: Step 1: Definition of Fixed Overhead Cost per UnitFixed overhead cost per unit refers to the portion…

Q: I need help solving this general accounting question with the proper methodology.

A: Step 1: Definition of Gross ProfitGross profit is the amount a company earns from sales after…

Q: What is the owner's equity?

A: Explanation of Total Assets :Total assets represent the combined value of everything a company owns…

Q: What is the total manufacturing cost for the period?

A: Definition of Total Manufacturing Cost:Total Manufacturing Cost represents the sum of all production…

Q: Please provide the accurate answer to this general accounting problem using valid techniques.

A: Step 1: Define Predetermined Overhead RateA predetermined overhead rate is calculated at the…

Q: I Want Answer

A: Step-by-step:Each unit requires 3 pounds of raw material.1. Calculate April's raw material…

Q: Can you help me solve this general accounting question using valid accounting techniques?

A: Step 1: Definitions Concept of Revenue:Revenue represents the total income earned by a business from…

Q: I am trying to find the accurate solution to this financial accounting problem with the correct…

A: Step 1: Define Return on Assets (ROA)Return on Assets (ROA) is a profitability ratio that measures…

Q: Please see an attachment for details the general accounting question with step by step explanation

A: To calculate the manufacturing cost per unit under absorption costing, we include both variable…

Q: The standard cost of Vibrant Sneakers includes 2.5 units of direct materials at $11.50 per unit.…

A: Explanation of Standard Cost: Standard cost is a predetermined expense amount that a company expects…

Q: Can you solve this general accounting question with the appropriate accounting analysis techniques?

A: Step 1: Definition of Absorption Costing Net Operating IncomeAbsorption costing includes all…

Q: I am trying to find the accurate solution to this financial accounting problem with the correct…

A: Cash Conversion Cycle (CCC) = Days Sales Outstanding (DSO) + Days Inventory on Hand (DIO) - Days…

Q: General accounting question

A: Step 1: Definition of Operating Income under Absorption CostingOperating income under absorption…

Q: Please provide the correct answer to this general accounting problem using valid calculations.

A: Step 1: Definition of Adjusting Entry for SuppliesAn adjusting entry for office supplies ensures…

Q: Grouper Corporation purchased machinery on January 1, 2025, at a cost of $264,000. The estimated…

A: Part (a): STRAIGHT-LINE DEPRECIATIONCalculation of Depreciable CostDepreciable Cost = Cost of…

Q: I need guidance with this general accounting problem using the right accounting principles.

A: Step 1: Definition of Indirect Manufacturing CostsIndirect manufacturing costs are costs that are…

Q: 2024 net income ? Financial accounting

A: Step 1: Definition of Projected Net IncomeProjected Net Income refers to the estimated or forecasted…

Q: General accounting

A: Step 1: Find beginning stockholders' equityWe use the basic accounting equation:Assets = Liabilities…

Q: Mia Steel started the year with total assets of $325,000 and total liabilities of $174,000. During…

A: Provided Data:Beginning Total Assets = $325,000Beginning Total Liabilities = $174,000Revenues during…

Q: General Accounting

A: Step 1: Define Accrual AccountingAccrual accounting recognizes revenues when earned and expenses…

Q: Financial accounting

A: Step 1: Definition of After-Tax Return After-tax return is the actual yield an investor receives…

Q: Can you explain the correct approach to solve this financial accounting question?

A: Definition of Return on Equity (ROE):Return on Equity (ROE) is a financial ratio that measures how…

Q: I need guidance on solving this financial accounting problem with appropriate financial standards.

A: Concept of Accounting Equation:The accounting equation is the fundamental principle that forms the…

Q: Can you help me solve this general accounting question using the correct accounting procedures?

A: Step 1: Calculate Beginning Stockholders' EquityBeginning Equity=Total Assets−Total…

Q: 4 POINTS

A: Economic dependency analysis plays a crucial role in understanding the real substance of…

Q: Please solve this question General accounting and step by step explanation

A: Step 1: Define Fixed Asset Purchases:Fixed Asset Purchases refers to the amount a company spends to…

Q: Please provide the correct answer to this financial accounting problem using valid calculations.

A: Step 1: Definition of Operating Cash Flow (OCF) represents the amount of cash a company generates…

Q: Please show me the valid approach to solving this financial accounting problem with correct methods.

A: Concept of Return on Investment (ROI)Return on Investment (ROI) is a profitability ratio that…

Q: What are the budgeted total manufacturing costs in April?

A: Explanation of Fixed Manufacturing Costs: Fixed manufacturing costs are production expenses that…

Q: I need help with this financial accounting problem using proper accounting guidelines.

A: Step 1: Definition of Break-even Sales and Required Sales for Target Operating IncomeBreak-even…

Q: What is the net realizable value of Sean Inc.'s receivable at December 31, 2022?

A: Concept of Net Realizable Value (NRV)Net Realizable Value (NRV) refers to the amount of cash a…

Q: Please provide the solution to this financial accounting question with accurate financial…

A: Step 1: Define Lower of Cost or Net Realizable Value (LCM)The LCM rule requires inventory to be…

Q: Can you solve this general accounting problem using accurate calculation methods?

A: Step 1: Definition of Liability for Reward RedemptionsA liability for reward redemptions is recorded…

Q: I want to this question answer for General accounting question not need ai solution

A: Step 1: Find the book value of the machineBook value = Original cost - Accumulated depreciationBook…

Q: I am looking for the correct answer to this general accounting question with appropriate…

A: Step 1: Definition of High-Low MethodThe high-low method is used to separate variable and fixed…

Question

100%

I need help finding the accurate solution to this general accounting problem with valid methods.

A company has an annual demand for inventory of 2,500 units. The cost of
placing an order is $60, and the annual holding cost per unit is $3. What is
the economic order quantity (EOQ) for this company?
a. 200 units
b. 316.23 units
c. 447 units
d. 500 units

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

What is the economic order quantity of this accounting question?
An entity uses the economic order quantity model and wishes to discover how many orders it need to place each year in order to meet its annual demand of 50,000 units. The cost of placing an order is £5 and the cost of holding a unit of inventory for year is £6. a. 177 b. 180 c. 174 d. 144
The following data pertains to Western Company’s materials inventory: Number of pounds required annually 16,000 Cost of placing an order P20 Annual carrying cost per pound of material P4What is the EOQ?
1. If the economic order quantity model is used, the economic lot size is a. 1,500 units b. 2,250 units c. 2,750 units d. None of these 2. At present, the companies total annual inventory cost is a. 7,500 b. 16,875 c. 22,500 d. 24,375
Kindly help me with accounting questions
What is the economic order quantity?
Title 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual... Description </o:p> 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual demand for the company is 5,000 units, and holding cost is $4 per unit. What is the ordering cost? 2. G-Tech’s monthly demand is 250 units. You are in charge of the inventory department. You know that the holding cost is $60 per unit and ordering cost is $100 per order. What is the EOQ? What is the number of orders per year? What is the annual holding cost? If lead time L is one week and demand rate is 60 units per week, what is the ROP?
Need help
1. Calculate Economic Order Quantity (EOQ), number of orders, annual ordering costs, annual carrying costs and total inventory costs from the following:Annual consumption: 6000 unitsCost of placing one Order: RO 60Carrying cost per unit: RO 22. Find out the EOQ, Annual ordering cost and annual holding cost from the following information. The demand is 19500 units per year, holding cost is RO 4 per unit for a year and ordering cost is RO 25 order. 3. Find out the ordering cost from the following information, Annual demand is 240 units, holding cost RO 4 per unit for a year and EOQ is 60 units.4. If the price of the material is RO 15 per unit and the annual consumption is 4000 units, the interest and store keeping charges are 20% of the value and the cost of placing of an order and receiving the goods is RO 60, how much material should be ordered at one time? 5. Alexander pump LLC uses about 75000 valves per year and the usage is fairly constant at 6250 unitsper month. The valve cost of…
Given the following informations annual sales in units 30,000 cost of placing an order $60,00 per unit carrying costs $ 1.50 Existing units of safety stock 300 a what is the EOQ? b. what is the average inventory based on the EOQ and the existing safety stock c. what is the maximum level of inventory? d. how many orders are placed each year?
Please provide answer this general accounting question
Please provide this question solution general accounting