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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 49
Ordering Cost, Carrying Cost, and Total Inventory-Related Cost
Ranger Company purchases 17,280 units of Product Beta each year in lots of 864 units per order. The cost of placing one order is $10, and the cost of carrying one unit of product in inventory for a year is $6.
Refer to the data for Ranger Company above.
Required:
1. How many orders for Beta does Ranger place per year?
2. What is the total ordering cost of Beta per year?
3. What is the total carrying cost of Beta per year?
4. What is the total cost of Ranger's inventory policy for Beta per year?
5. CONCEPTUAL CONNECTION Is Ranger's order size equal to the EOQ amount? How could Ranger get closer to EOQ without actually figuring out the economic order quantity?
Ranger Company purchases 17,280 units of Product Beta each year in lots of 864 units per order. The cost of placing one order is $10, and the cost of carrying one unit of product in inventory for a year is $6.
Refer to the data for Ranger Company above.
Required:
1. How many orders for Beta does Ranger place per year?
2. What is the total ordering cost of Beta per year?
3. What is the total carrying cost of Beta per year?
4. What is the total cost of Ranger's inventory policy for Beta per year?
5. CONCEPTUAL CONNECTION Is Ranger's order size equal to the EOQ amount? How could Ranger get closer to EOQ without actually figuring out the economic order quantity?
Explanation
Verified
Verified
(1)
Number of orders of Beta that R plac...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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