A firm is planning for its financing needs and the basic fixed-order-quantity uses inventory model (EOQ). What is the total cost (TC), including purchasing cost, of the inventory given an annual demand of 12,000 units, ordering cost of $40, a holding cost per unit per year of $5, an EOQ of 500 units, and a cost per unit of inventory of $120?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
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What is the total cost

A firm is planning for its financing needs and
the basic fixed-order-quantity
uses
inventory model (EOQ). What is the total
cost (TC), including purchasing cost, of the
inventory given an annual demand of 12,000
units, ordering cost of $40, a holding cost per
unit per year of $5, an EOQ of 500 units, and
a cost per unit of inventory of $120?
Transcribed Image Text:A firm is planning for its financing needs and the basic fixed-order-quantity uses inventory model (EOQ). What is the total cost (TC), including purchasing cost, of the inventory given an annual demand of 12,000 units, ordering cost of $40, a holding cost per unit per year of $5, an EOQ of 500 units, and a cost per unit of inventory of $120?
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