Sadida (Pty) Ltd sells different grades of cheese to the general public as well as to other retailers. The company hired you as its management accountant two months ago. Recently, you have been tasked with instituting measures to reduce the company's rapidly increasing costs. After some research, you have come to the realization that the company does not make use of Economic Order Quantity (EOQ) and you believe that this will be a good place to start your cost-reduction journey. You have therefore rounded up the following information regarding one of its products: Weekly demand Purchase price per unit Cost of placing an order Insurance Direct stockholding costs Lead time Safety inventory 2 650 units R180 R230 10% of the purchase price R17 per unit 2 weeks week's demand Required: 3.2.1 Calculate the economic order quantity for the company. Note: round off your answer to the nearest whole number. 3.2.2 Calculate the total ordering cost for the company. Note: Round off your calculations to the nearest whole number. 3.2.3 Calculate the reorder point for the company

Sadida (Pty) Ltd sells different grades of cheese to the general public as well as to other retailers. The company hired you as its management accountant two months ago. Recently, you have been tasked with instituting measures to reduce the company's rapidly increasing costs. After some research, you have come to the realization that the company does not make use of Economic Order Quantity (EOQ) and you believe that this will be a good place to start your cost-reduction journey. You have therefore rounded up the following information regarding one of its products: Weekly demand Purchase price per unit Cost of placing an order Insurance Direct stockholding costs Lead time Safety inventory 2 650 units R180 R230 10% of the purchase price R17 per unit 2 weeks week's demand Required: 3.2.1 Calculate the economic order quantity for the company. Note: round off your answer to the nearest whole number. 3.2.2 Calculate the total ordering cost for the company. Note: Round off your calculations to the nearest whole number. 3.2.3 Calculate the reorder point for the company

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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