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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 52
EOQ, 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. What is the EOQ for Beta?
2. How many orders for Beta will Ranger place per year under the EOQ policy?
3. What is the total ordering cost of Beta for a year under the EOQ policy?
4. What is the total carrying cost of Beta per year under the EOQ policy?
5. What is the total cost of Ranger's inventory policy for Beta per year under the EOQ policy?
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. What is the EOQ for Beta?
2. How many orders for Beta will Ranger place per year under the EOQ policy?
3. What is the total ordering cost of Beta for a year under the EOQ policy?
4. What is the total carrying cost of Beta per year under the EOQ policy?
5. What is the total cost of Ranger's inventory policy for Beta per year under the EOQ policy?
Explanation
Verified
Verified
(1) Economic Order Quantity (EOQ) for B ...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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