Calculate the annual ordering cost for component 427. A company has recorded the following details for Component 427 which is sold in boxes of 10 components Ordering cost Purchase price Holding costs Monthly demand 1 500 components Component 427 is currently ordered in batches of 240 boxes at a time. The average inventory held is 120 boxes. OA. R180. OB. R320. R32 per order placed R20 per box of 10 components 10% of purchase price O C. R240. OD. R120.
Calculate the annual ordering cost for component 427. A company has recorded the following details for Component 427 which is sold in boxes of 10 components Ordering cost Purchase price Holding costs Monthly demand 1 500 components Component 427 is currently ordered in batches of 240 boxes at a time. The average inventory held is 120 boxes. OA. R180. OB. R320. R32 per order placed R20 per box of 10 components 10% of purchase price O C. R240. OD. R120.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Please Introduction and explanation also what is correct option why ?and what is incorrect option why?. Please explain and no plagiarism please
Transcribed Image Text:Calculate the annual ordering cost for component 427.
A company has recorded the following details for Component 427 which is sold in boxes of 10
components
Ordering cost
Purchase price
Holding costs
10% of purchase price
Monthly demand
1 500 components
Component 427 is currently ordered in batches of 240 boxes at a time. The average inventory held is
120 boxes.
R32 per order placed
R20 per box of 10 components
O A. R180.
B. R320.
OC. R240.
OD. R120.
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