Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each year. Further, assume that Palmer can order the ink at a cost of $2 per gallon plus fixed ordering costs of $100 per order. The firm's carrying cost is 20 percent of the inventory value, at cost. What is the EOQ? * O 21,456 13,563 26,833 O 43,987 30,040

Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each year. Further, assume that Palmer can order the ink at a cost of $2 per gallon plus fixed ordering costs of $100 per order. The firm's carrying cost is 20 percent of the inventory value, at cost. What is the EOQ? * O 21,456 13,563 26,833 O 43,987 30,040

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 17P

See similar textbooks

Related questions

Q: Passion Softdrinks annual sales amount to 900 000 units. Orders are placed in multiples of 300…

A: 4.1.1 Calculate the EOQTo calculate the Economic Order Quantity (EOQ) for Passion Softdrinks, we use…

Q: Nowlin Pipe & Steel has projected sales of 19,600 pipes this year, an ordering cost of $5 per order,…

A: The EOQ is the point at which the total costs of ordering and carrying inventory are at a minimum.…

Q: Economic order quantity (EOQ). Tinnendo, Inc. believes it will sell 4 million zen-zens, an…

A: Annual Carrying Costs = [$0.03*((4,000,000/40)/2)] Annual Carrying Costs = $1,500 Therefore, the…

Q: Firm B's demand for a product is 10 units per month. Its supplier charges an ordering cost of $5 per…

A: The expense that a company incurs for managing and storing its unsold inventory over the accounting…

Q: Sanchez, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale…

A: Cost of switching = Price per unit * Current Quantity sold per month + Cost per unit*(New unit sales…

Q: Hammond Supplies expects sales of 207,640 units per year with carrying costs of $4.23 per unit and…

A: Demand = 235,880Carrying cost = 2.18Ordering cost = 3.1First, find the Economic Order Quantity…

Q: Chen's Chemicals, a firm that produces industrial chemicals, uses 26,000 gallons of a particular…

Q: A company sells 100-pound bags of a product for $25 a bag. The fixed costs of this operation are…

A: EBIT stands for earning before Interest and Tax. EBIT is earnings after deduction of all operating…

Q: Ansell plc produces 2,400,000 units in 2020. The variable production cost per unit is £8. Fixed…

A: Absorption costing demonstrates that all the expenses related to manufacturing a product are…

Q: Assume Palmer Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the…

A: Ordering cost is the expense related to placing the order to the supplier. Such expense is bear by…

Q: should order units times a year. he minimum inventory cost is $

A: Given :- Annual demand = D = 3000 UNITS Ordering cost = Co = $50 Annual unit inventory carrying cost…

Q: If KFC has a 10.85% increase in sales, its EBIT will increase by __________. Assume that KFC…

A: Degree of Operating leverage measure the percentage change in operating income (EBIT) for a given…

Q: Buckley Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000 units.…

A: (D) i) Annual Demand (U) = 5000 x 12 = 60,000 units Annual holding cost (C) = 5% of price = 5% x…

Q: The Games Company produces a specialty football item, and has the following information available…

Question

1
Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each
year. Further, assume that Palmer can order the ink at a cost of $2 per
gallon plus fixed ordering costs of $100 per order. The firm's carrying cost
is 20 percent of the inventory value, at cost. What is the EOQ? *
21,456
13,563
26,833
43,987
30,040

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

1.3 REQUIRED Use the information given below to calculate the most economic quantity to order each time for 2023 (expressed to next whole number). INFORMATION Milton Wholesalers expects to sell approximately 3 600 cases of soap per month during 2023. Each case of soap costs R200. The cost of placing an order for soap is estimated to be R20. The inventory holding cost of one case of soap is 5% of the unit purchase price.
EOQ? CALCULATE
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
Problem 2
1.2 REQUIRED Calculate the economic order quantity (EOQ) from the information provided below. INFORMATION The monthly demand for an item sold by Super Stores is 1 000 units. The cost is R6 per unit and the item is sold at cost price plus 50%. The ordering cost amounts to R25 per order and the holding cost per unit is equal to 10% of the unit cost of the item.
9. Martin Company uses 625 units of a part each year. The cost of placing one order is $8; the cost of carrying one unit in inventory for a year is $4. What is the EOQ for Martin? * O 50 O 100 O20 30 O 45
answer quickly
Answer me
5. Genesis Company is a wholesaler. It purchases 60.000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma. Example: 10,000 Required: Previously, the company had been purchasing 5,000 units of product X per order: a. What is the ordering cost per year under the previous policy? b. The annual carrying cost? c. How much money does the company save over the policy of purchasing 5,000 units per order using the EOQ policy?
Question 9 options: With the following information, answer the following questions using the specified format (For example: 1000 units) A company buys 10,000 units of product A.The order cost for this product is $100.00 and its annual carrying cost per unit is $1.20. The company also buys 200,000 units of product B. In this case, the order cost is $75.00 and it's annual carrying cost is $0.75. The EOQ for product A is _____. With the following information, answer the following questions in the specified format (For example: 1000 units) A company buys 10,000 units of product A.The order cost for this product is $100.00 and its annual carrying cost per unit is $1.20. The company also buys 200,000 units of product B. In this case, the order cost is $75.00 and it's annual carrying cost is $0.75. The EOQ for product B is _____.
PROVIDE ANSWER WITH EXPLANATION THANK YOU
Let us suppose that the abc company total annual sales solution this question