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The bookstore manager wants to determine the bookstore's optimal order quantity, given the foregoing quantity discount information.

The bookstore manager wants to determine the bookstore's optimal order quantity, given the foregoing quantity discount information.

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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1. The bookstore at State University purchases jackets sporting the school name and logo from a vendor. The vendor sells the jackets to the store for P1900 apiece. The cost to the bookstore for placing an order is P6000, and the carrying cost is 25% of the purchase price. The bookstore manager estimates that 1,700 jackets will be sold during the year. The vendor has offered the bookstore the following volume discount schedule: Order Size Discount % 12 to 299 300 to 499 2 500 to 799 4 800 and over The bookstore manager wants to determine the bookstore's optimal order quantity, given the foregoing quantity discount information.
Transcribed Image Text:1. The bookstore at State University purchases jackets sporting the school name and logo from a vendor. The vendor sells the jackets to the store for P1900 apiece. The cost to the bookstore for placing an order is P6000, and the carrying cost is 25% of the purchase price. The bookstore manager estimates that 1,700 jackets will be sold during the year. The vendor has offered the bookstore the following volume discount schedule: Order Size Discount % 12 to 299 300 to 499 2 500 to 799 4 800 and over The bookstore manager wants to determine the bookstore's optimal order quantity, given the foregoing quantity discount information.
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