I need answer of this question solution general accounting You purchase lubricating oil in 55-gallon drums and consume anaverage of 642 drums per year. Preparing an order and receiving ashipment of lubricant costs $7 per order. Annual carrying costs are $73per drum.Determine the EOQ.

Step 1: Define Economic Order Quantity (EOQ)The optimal quantity a business should acquire to reduce…

Answered: You purchase lubricating oil in…

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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Longwe chemical Com. ltd requires 20,000 gallons of material annualy the cost of placing an order is shs 20 and the annual carring cost per gallon is shs 5. Required:Determine the EOQ from potential order size of 300,400,500,600,700 and 800 gallons.Ascertain the total cost associated with EOQ.
A service garage uses 204 boxes of cleaning cloths a year. The boxes cost $12 each. The cost to place one order is $15, and the cost to hold one box in inventory for a year is $2.40. Using this information, what is our total holding and ordering cost if we currently order 12 boxes at a time?
Electric spark Co., uses 60,000 of component Zima. The cost of placing an order is estimated at $17.28 per order. The annual holding cost is 20% of the purchase price of $20 per unit. The following information is provided to you by the management accountant to use in your analysis: The Normal usage 200 units per day Maximum usage 280 units per day Minimum usage 120 units per day Reorder period 20 to 30 days Required: 1. Determine the EOQ using the equation method 2. Calculate the total cost of inventory per year, in case the company decided to use the EOQ. 3. Electric spark has been offered a 2 per cent discount on the cost if it places orders in quantities of 20,000. Discuss whether the company should accept the discount and place larger orders,
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An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The supplier pays set up cost equal to $20 for each battery and estimates that the annual holding cost is $8.4. The working days for the company are 300 days per year Determine the economic order quantity (EOQ)
Orchard Supply sells lawn fertilizer at a price of $12.50 per bag. If the markup is 25% of cost, find the cost.
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You purchase lubricating oil in 55-gallon drums and consume an average of 642 drums per year. Preparing an order and receiving a shipment of lubricant costs $7 per order. Annual carrying costs are $73 per drum. Determine the EOQ.