An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1500 batteries. The supplier pays 25 R.O for each battery and estimates that the annual holding cost is 30% of the battery's value. It costs approximately 30 R.0 to place an order. The supplier currently orders 125 batteries per month. a. Determine the EOQ. b. How many orders will be placed per year using the EOQ? c. Determine the total cost for the current order quantity. d. Determine the total inventory cost for the EOQ, How has ordering cost changed?
An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1500 batteries. The supplier pays 25 R.O for each battery and estimates that the annual holding cost is 30% of the battery's value. It costs approximately 30 R.0 to place an order. The supplier currently orders 125 batteries per month. a. Determine the EOQ. b. How many orders will be placed per year using the EOQ? c. Determine the total cost for the current order quantity. d. Determine the total inventory cost for the EOQ, How has ordering cost changed?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...
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