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Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Vision earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Vision sells 225 lenses per week. The following data are available:           Relevant ordering costs per purchase order                        $41.25         Relevant insurance, materials handling, breakage,         and so on, per year                                                              $ 4.50   What is the economic order quantity for Vision? a. 328 lenses b. 457 lenses c. 161 lenses d. 266 lenses

Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Vision earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Vision sells 225 lenses per week. The following data are available:           Relevant ordering costs per purchase order                        $41.25         Relevant insurance, materials handling, breakage,         and so on, per year                                                              $ 4.50   What is the economic order quantity for Vision? a. 328 lenses b. 457 lenses c. 161 lenses d. 266 lenses

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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Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Vision earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Vision sells 225 lenses per week. The following data are available:

 

        Relevant ordering costs per purchase order                        $41.25

        Relevant insurance, materials handling, breakage,

        and so on, per year                                                              $ 4.50

 

What is the economic order quantity for Vision?

a. 328 lenses

b. 457 lenses

c. 161 lenses
d. 266 lenses
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