FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Economic order quantity
(EOQ).
Tinnendo, Inc. believes it will sell
4
million zen-zens, an electronic game, this coming year. Note that this figure is for annual sales. The inventory manager plans to order zen-zens
46
times over the next year. The carrying cost is
$0.04
per zen-zen per year. The order cost is
$617
per order. It turns out that the marketing manager has underestimated the zen-zen market. The zen-zens are a smash, and current estimates are that the company will sell
8
million of them per year. Should the inventory manager simply double the EOQ order quantity? Find the new
EOQ,
and verify that it is the correct order quantity by finding the new carrying cost and new ordering cost.
Should the inventory manager simply double the EOQ order quantity? (Select the best response.)
A. Yes
B. No
What is the new
EOQ? zen-zens (Round to the nearest whole unit.)
What is the new annual carrying cost for the zen-zens? (Round to the nearest dollar.)
What is the new annual ordering cost for the zen-zens? (Round to the nearest dollar.)
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