Last Year Spiller Beamish Plc Incurred Total Costs of £250

Multiple Choice

Last year Spiller Beamish plc incurred total costs of £250 in placing 10 orders for a product.This year the management accountant would like to use the EOQ model to see if the product should be ordered more, or less, frequently.Holding costs for the product are £3 per unit, and demand for the product for the period is estimated at 7000 units.What is the Economic Order Quantity (to the nearest whole unit) , assuming that the cost of placing one order is unchanged from the previous year?

A) 342 units
B) 1080 units
C) 242 units
D) 512 units