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Mtshali's Bridal Ltd uses 1,440,000 meters of material each year. Furthermore, the firm orders the material at a cost of R2 per meter, plus fixed ordering costs of R100 per order. The firm's carrying cost is 20% of the inventory value at cost. Assume a 365-day year for this company. What is the firm's estimated EOQ?

Mtshali's Bridal Ltd uses 1,440,000 meters of material each year. Furthermore, the firm orders the material at a cost of R2 per meter, plus fixed ordering costs of R100 per order. The firm's carrying cost is 20% of the inventory value at cost. Assume a 365-day year for this company. What is the firm's estimated EOQ?

FINANCIAL ACCOUNTING
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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What is the firm's estimated EOQ?

Mtshali's Bridal Ltd uses 1,440,000 meters of material each year. Furthermore, the firm orders the material at a cost of R2 per meter, plus fixed ordering costs of R100 per order. The firm's carrying cost is 20% of the inventory value at cost. Assume a 365-day year for this company. What is the firm's estimated EOQ?
Transcribed Image Text:Mtshali's Bridal Ltd uses 1,440,000 meters of material each year. Furthermore, the firm orders the material at a cost of R2 per meter, plus fixed ordering costs of R100 per order. The firm's carrying cost is 20% of the inventory value at cost. Assume a 365-day year for this company. What is the firm's estimated EOQ?
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