The Games Company produces a specialty football item, and has the following information available concerning its inventory items: Relevant ordering costs per purchase order £150 Relevant carrying costs per year: Required annual return on investment 10% Required other costs per year £1.40 Annual demand is 10,000 packages per year. The purchase price per package is £16. What are the relevant total costs at the economic order quantity? a. £1,000 b. £1,500 C. £3,000 d. £3,500
The Games Company produces a specialty football item, and has the following information available concerning its inventory items: Relevant ordering costs per purchase order £150 Relevant carrying costs per year: Required annual return on investment 10% Required other costs per year £1.40 Annual demand is 10,000 packages per year. The purchase price per package is £16. What are the relevant total costs at the economic order quantity? a. £1,000 b. £1,500 C. £3,000 d. £3,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Games Company produces a specialty football item, and has the following
information available concerning its inventory items:
Relevant ordering costs per purchase order £150
Relevant carrying costs per year:
Required annual return on investment 10%
Required other costs per year
£1.40
Annual demand is 10,000 packages per year. The purchase price per package is £16.
What are the relevant total costs at the economic order quantity?
a.
£1,000
b. £1,500
C.
£3,000
d. £3,500
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