A flower shop uses 230 clay pots a month. The pots are purchased for $2 each. Annual holding cost is estimated to be 25 percent of purchase cost, and ordering cost is $18 per order. The manager has been using an order quantity of 230 flower pots. a. Calculate the EOQ. (Round the final answer to the nearest whole number.) EOQ pots. b. Calculate the EOQ's total annual inventory control cost. (Round the final answer to 2 decimal places.) TC $ c. What additional annual inventory control cost is the shop incurring by using the current order quantity? (Round the final answer to 2 decimal places.) Additional cost $

A flower shop uses 230 clay pots a month. The pots are purchased for $2 each. Annual holding cost is estimated to be 25 percent of purchase cost, and ordering cost is $18 per order. The manager has been using an order quantity of 230 flower pots. a. Calculate the EOQ. (Round the final answer to the nearest whole number.) EOQ pots. b. Calculate the EOQ's total annual inventory control cost. (Round the final answer to 2 decimal places.) TC $ c. What additional annual inventory control cost is the shop incurring by using the current order quantity? (Round the final answer to 2 decimal places.) Additional cost $

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

A flower shop uses 230 clay pots a month. The pots are purchased for $2 each. Annual holding cost is estimated to be 25 percent of
purchase cost, and ordering cost is $18 per order. The manager has been using an order quantity of 230 flower pots.
a. Calculate the EOQ. (Round the final answer to the nearest whole number.)
EOQ
pots
b. Calculate the EOQ's total annual inventory control cost. (Round the final answer to 2 decimal places.)
TC
$
c. What additional annual inventory control cost is the shop incurring by using the current order quantity? (Round the final answer to 2
decimal places.)
Additional cost
$

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