### Pricing InformationA company can purchase a raw material at three different price points depending on the order size:- **Less than 100 pounds**: $20 per pound- **100 pounds to 999 pounds**: $19 per pound- **1,000 pounds or more**: $18 per pound### Cost Details- **Order placement cost**: $40- **Annual demand**: 3,000 units- **Holding (or carrying) cost**: 25% of the material price### GoalDetermine the economic order quantity to purchase each time and the total cost associated with this quantity.### Calculation Table- **Economic Order Quantity**: _____ pounds- **Total Cost**: $ _____

Given data Rate per size Less than 100 pounds = $20 100 pounds to 999 pounds = $19 1,000 pounds or…

A particular raw material is available to a company at three different prices, depending on the size of the order: Less than 100 pounds 100 pounds to 999 pounds 1,000 pounds or more $20 per pound $ 19 per pound $ 18 per pound The cost to place an order is $40. Annual demand is 3,000 units. Holding (or carrying) cost is 25 percent of the material price. What is the economic order quantity to buy each time, and its total cost? Economic order pounds quantity Total cost $

A particular raw material is available to a company at three different prices, depending on the size of the order: Less than 100 pounds 100 pounds to 999 pounds 1,000 pounds or more $20 per pound $ 19 per pound $ 18 per pound The cost to place an order is $40. Annual demand is 3,000 units. Holding (or carrying) cost is 25 percent of the material price. What is the economic order quantity to buy each time, and its total cost? Economic order pounds quantity Total 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

### Pricing Information
A company can purchase a raw material at three different price points depending on the order size:

- **Less than 100 pounds**: $20 per pound
- **100 pounds to 999 pounds**: $19 per pound
- **1,000 pounds or more**: $18 per pound

### Cost Details
- **Order placement cost**: $40
- **Annual demand**: 3,000 units
- **Holding (or carrying) cost**: 25% of the material price

### Goal
Determine the economic order quantity to purchase each time and the total cost associated with this quantity.

### Calculation Table
- **Economic Order Quantity**: _____ pounds
- **Total Cost**: $ _____

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