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Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream. The vendor covers all shipping costs. Office Supply House is not required to inspect the shipment upon entry. Office Supply House earns 20% on its cash investments. The purchase order lead time two weeks. The following cost data are available: Relevant ordering costs per purchase order Relevant insurance, materials handling, breakage, and so on, per year What is the economic order quantity? 324 reams 235 reams 114 reams 100 reams $53.75 $4.25

Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream. The vendor covers all shipping costs. Office Supply House is not required to inspect the shipment upon entry. Office Supply House earns 20% on its cash investments. The purchase order lead time two weeks. The following cost data are available: Relevant ordering costs per purchase order Relevant insurance, materials handling, breakage, and so on, per year What is the economic order quantity? 324 reams 235 reams 114 reams 100 reams $53.75 $4.25

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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Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream. The vendor covers all shipping costs. Office Supply House is not required to inspect the shipment upon entry. Office Supply House earns 20% on its cash investments. The purchase order lead time two weeks. The following cost data are available: $53.75 $4.25 Relevant ordering costs per purchase order Relevant insurance, materials handling, breakage, and so on, per year What is the economic order quantity? 324 reams 235 reams 114 reams 100 reams
Transcribed Image Text:Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream. The vendor covers all shipping costs. Office Supply House is not required to inspect the shipment upon entry. Office Supply House earns 20% on its cash investments. The purchase order lead time two weeks. The following cost data are available: $53.75 $4.25 Relevant ordering costs per purchase order Relevant insurance, materials handling, breakage, and so on, per year What is the economic order quantity? 324 reams 235 reams 114 reams 100 reams
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