em 10. At the present, Roman Company produces 2,250 units of Product X per production r a total of 15 production runs per year. The company is considering to use the economic quantity model to determine the economic lot size and the number of production runs that inimise the total inventory carrying cost and set up cost for Product X. The following ation pertains to Roman's flagship Product X: Annual demand 33,750 units P15 Annual cost to hold one unit of Product X Costs to initiate a product run Beginning inventory P500 Zero

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. If the economic order quantity model is used, the economic lot size is
 
a. 1,500 units
b. 2,250 units
c. 2,750 units
d. None of these
 
2. At present, the companies total annual inventory cost is
 
a. 7,500
b. 16,875
c. 22,500
d. 24,375
Problem 10. At the present, Roman Company produces 2,250 units of Product X per production
run, for a total of 15 production runs per year. The company is considering to use the economic
order quantity model to determine the economic lot size and the number of production runs that
will minimise the total inventory carrying cost and set up cost for Product X. The following
information pertains to Roman's flagship Product X:
Annual demand
33,750 units
P15
Annual cost to hold one unit of Product X
P500
Costs to initiate a product run
Beginning inventory
Zero
Transcribed Image Text:Problem 10. At the present, Roman Company produces 2,250 units of Product X per production run, for a total of 15 production runs per year. The company is considering to use the economic order quantity model to determine the economic lot size and the number of production runs that will minimise the total inventory carrying cost and set up cost for Product X. The following information pertains to Roman's flagship Product X: Annual demand 33,750 units P15 Annual cost to hold one unit of Product X P500 Costs to initiate a product run Beginning inventory Zero
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