Abner Company has an annual demand of 13,000 units of Material A. The cost per unit is P14. The order cost is P200 per order; and the annual inventory carrying cost per unit is P5.20. Assume that the units will be required evenly throughout the year. Required: Compute for the following: a. Economic order quantity b. Number of orders in a year. C. Average inventory based on economic order quantity. d. Total carrying cost and total ordering costs at economic order quantity.
Abner Company has an annual demand of 13,000 units of Material A. The cost per unit is P14. The order cost is P200 per order; and the annual inventory carrying cost per unit is P5.20. Assume that the units will be required evenly throughout the year. Required: Compute for the following: a. Economic order quantity b. Number of orders in a year. C. Average inventory based on economic order quantity. d. Total carrying cost and total ordering costs at economic order quantity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 2
Transcribed Image Text:cost P 40.00 to place each order. The annual carrying cost is P 2.00.
per unit. It is anticipated that it will
Determine:
a. The most economical order quantity
b. The total cost of ordering and carrying át the EOQ point
Problem 2
Abner Company has an annual demand of 13,000 units of Material A. The cost per
unit is P14. The order cost is P200 per order; and the annual inventory carrying cost
per unit is P5.20. Assume that the units will be required evenly throughout the year.
Required: Compute for the following:
a. Economic order quantity
b. Number of orders in a year.
C. Average inventory based on economic order quantity.
d. Total carrying cost and total ordering costs at economic order quantity.
Problem 3
Dlive Corporation buys a material for P20 per unit. Sixteen thousand parts a year an
ieeded. Carrying cost is P3.00 per unit and the ordering cost is P15.
equired:
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