A company sells 3,000 units of an item each year. The carrying cost per unit is $1.50, and the fixed cost per order is $80. What is the economic order quantity (EOQ)? a. 350 units b. 374 units c. 566 units d. 480 units

A company sells 3,000 units of an item each year. The carrying cost per unit is $1.50, and the fixed cost per order is $80. What is the economic order quantity (EOQ)? a. 350 units b. 374 units c. 566 units d. 480 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: Need help with this question solution general accounting

A: Approach to solving the question: For better clarity of the solution, I have provided both the…

Q: Don't use Ai to answer this problem

A: Explanation of Weighted-Average Method:The weighted-average method is a process costing technique…

Q: Provide correct answer general accounting

A: To calculate the payback period, we determine how long it takes for the cumulative cash flows to…

Q: I want to this question answer general Accounting

A: Step 1: Define Working CapitalWorking capital is a measure of a company's liquidity, operational…

Q: Question

A: The question requires the determination of the ROA. ROA or Return on Assets is a profitability…

Q: Ok Corporation uses the weighted-average method in its process costing. The following data concern…

A: To calculate the cost of the ending work-in-process (WIP) inventory and the cost of units…

Q: General Accounting question

A: Step 1: Define Corporate Tax PayableCorporate tax payable is the amount of money a corporation owes…

Q: Financial Accounting

A: As per CAPM, Cost of Equity = Risk-free Rate + Beta*(Market Rate-Risk-free Rate) Cost of Equity =…

Q: General accounting

A: Step 1: Definition of Activity RateThe activity rate is calculated as the cost per unit of activity…

Q: What is the cost of goods manufactured for the year ended December 31 , 2004? General accounting

A: Step 1: Define Cost Of Goods ManufacturedIt represents the sum of all the costs incurred on the…

Q: What chasse's free cash flow and cash flow adequacy ratio ? General accounting

A: Step 1: Define Cash Flow Adequacy RatioThe financial ratio used for depicting the requirement of…

Q: Peak performance Inc. Has the following data for its product: please answer the accounting question

A: Step 1: Define Target Sales in UnitsTarget Sales in Units refers to the number of units a company…

Q: Quick answer of this accounting questions

A: Step 1: Identify the operating leverage (OL)Step 2: Identify the percentage change in salesStep 3:…

Q: Brightside pest Control... please answer this accounting question

A: Step 1: Define Net IncomeNet income is the amount of earnings left after subtracting all expenses,…

Q: Provide correct answer general Accounting

A: Steps for Calculations:A) Cost of Goods Manufactured (COGM):Use the formula: • COGM = Direct…

Q: I need Solution

A: 1. Classification of Activities in the Cash Flow Statement:The cash flow statement is divided into…

Q: Solve this question general Accounting

A: Step 1: Define Gross MarginGross margin is also known as gross profit which is the difference…

Q: Trio Company reports the following information for the current year, which is its first year of…

A: Detailed explanation:Under variable costing, only variable costs are included in the product cost.…

Q: Can you please give me correct answer this accounting question?

A: Step 1: Define Interest ExpenseInterest expense represents the cost incurred by an entity for…

Q: The balance sheet of United Studios at December 31 showed assets of $76,000 and shareholders equity…

A: Explanation of Assets:Assets are resources owned by a company that have economic value and are…

Q: What would be the cash from operating activities on these general accounting question?

A: Step 1: Define Cash from Operating ActivitiesCash from operating activities is calculated using the…

Q: Hi expert provide correct option general accounting

A: Step 1: Define Gross ProfitNet sales are reduced by the cost of products sold to generate gross…

Q: Do fast answer of this accounting questions

A: Step 1: Definition of Straight-Line Depreciation with Revised EstimatesStraight-line depreciation…

Q: Answer?? General Account

A: To calculate the cost per equivalent unit for conversion costs, we use the weighted-average method…

Q: Do fast answer of this general accounting question

A: Step 1: Define Standard CostingStandard costs are used in variance analysis to help managers…

Q: A. B. C.

A: Explanation of Predetermined Overhead Rate: This is a rate calculated at the beginning of the…

Q: How much did shareholders initially invest in the business on these general accounting question?

A: Step 1: Define Initial Shareholder InvestmentInitial shareholder investment refers to the equity…

Q: Please see attachment for details

A: Explanation of Net Sales:Net sales represent the total revenue a company earns from its primary…

Q: I want to this question answer general Accounting

A: Step 1: Define Net IncomeThe net income of an individual refers to the cash received from the…

Q: Please solve the problem

A: Approach to solving the question: The basic formula of Asset Asset = Liabilities + Owner's…

Q: Can you please answer this accounting question?

A: Step 1: Define Degree of Operating Leverage (DOL)The Degree of Operating Leverage (DOL) measures how…

Q: Please provide answer this accounting question answer do fast

A: Step 1: Define Contribution MarginContribution margin is the amount remaining from sales revenue…

Q: Give me true answer this general accounting question

A: Step 1: Define Cash Paid on Salaries PayableCash paid on salaries payable is the total amount of…

Q: What is the amount of gain on these general accounting question?

A: Step 1: Define Gain on Sale of an AssetGain on Sale is the difference between the net selling price…

Q: Find solution in general account questions

A: To compute the cost of ending work in process (WIP) inventory, we calculate the equivalent units for…

Q: ?????

A: To find out how much you will have in 11 years, we calculate the future value of the $43,000 after…

Q: During FY 2005 T-REX Manufacturing had total manufacturing costs are $418,000. Their cost of goods…

A: Explanation of Manufacturing Costs: These are all costs directly involved in the production of…

Q: What was the cost of goods sold for the year ??

A: Calculation of Total Manufacturing CostTotal Manufacturing Cost = Direct Materials used + Direct…

Q: For the year ended December 31, 2015, Pering Co. reported pretax financial income of $550,000. Its…

A: Step 1: Identify the FormulaThe relationship between taxable income and current tax expense is:…

Q: The basic accounting equation is: a. Assets A equals Liabilities L + Stockholders' Salaries SS. b.…

A: The correct answer is:b. Assets A equals Liabilities L + Stockholders' Equity SE. Explanation:The…

Q: Thompson Manufacturing allocates overhead based on machine hours. The following data is provided: ⚫…

A: Step 1: Definition of Over- or Under-Allocated OverheadOver- or under-allocated manufacturing…

Q: Can you please answer the accounting question?

A: Calculation of Total AssetsTotal Assets = Current Asset + Fixed Assets =…

Q: A company is analyzing its break-even point for a product with a selling price of $63 per unit. The…

A: Explanation of Break-Even Point:The Break-Even Point represents the sales volume at which total…

Q: Hello teacher please help me this question

A: Step 1: Define Standard CostThe standard cost per unit of raw materials is the expected or budgeted…

Q: During the current year, the assets of Vitamin Water increased by $73,000, and the liabilities…

A: Problem:During the current year, the assets of Vitamin Water increased by $73,000, and the…

Q: please provide solution of this Question

A: Step 1: Compute the total amount realized from the sale of the building by adding the amount…

Q: What was the interest revenue that techprime earned in this period??

A: To determine the interest revenue that TechPrime earned for the year ended December 31, 2019, we…

Q: Please provide answer this accounting problem not use ai

A: Step 1: Define Non-Operating LiabilitiesNon-operating liabilities are obligations not directly…

Q: Accounting Problem

A: Explanation of Economic Order Quantity (EOQ):Economic Order Quantity (EOQ) is the optimal order…

Q: Which of the following statements is true of this transaction?

A: Explanation:When Joey Corporation borrows $500,000 from the bank:Cash increases by $500,000 (an…

Question

100%

Financial Accounting Question

A company sells 3,000 units of an item each year. The
carrying cost per unit is $1.50, and the fixed cost per order is
$80.
What is the economic order quantity (EOQ)?
a. 350 units
b. 374 units
c. 566 units
d. 480 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

Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?
Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the carrying cost for one pound of oats is 0.45. Required: 1. Compute the economic order quantity for oats. 2. Compute the carrying and ordering costs for the EOQ.
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?
Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods decreased by 5,000? What would be the effect on the cost of goods sold?
What is the economic order quantity?
The Best Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items: Ordering costs per purchase order Carrying costs per year P15,000 P300 per unit Annual demand is 20,000 packages per year. The quantity per order equals 1,000 units. What is the total annual ordering and holding costs? P450,000 P25,000 P300,000 P150,000
The Best Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items: Ordering costs per purchase order Carrying costs per year P15,000 P300 per unit Annual demand is 20,000 packages per year. The purchase price per package is P1,600. What is the economic order quantity? 2,000,000 units 3,464 units 150,000 units 1,414 units
Diagnostic Supplies has expected sales of 98,000 units per year, carrying costs of $5 per unit, and an ordering cost of $8 per order. a. What is the economic ordering quantity? Economic ordering quantity b-1. What is the average inventory? Average inventory b-2. What is the total carrying cost? Total carrying cost units units
2.3 REQUIRED Calculate the annual economic order quantity from the information provided below. INFORMATION The following details have been supplied by Yolo Limited for one of its products: Monthly sales 6 000 units Carrying costs as a percentage of the unit purchase price 10% Purchase price per unit R50 Cost of placing an order R20