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Problem 1: Emil Traders, Inc. sells cellphone cases which it buys from a local manufacturer. Emil Traders sells 24,000 cases evenly throughout the year. The cost of carrying one unit in inventory for one year is P11.52 and the order cost per order is P38.40. If Emil Traders would buy in economic order quantities, the total order costs is
A. P921,600
B. P2,304
C. P76,800
D. P460,800
Problem 2: Which of the following would cause every average inventory holding to increase, other things held constant?
A. the purchase price of inventory items increase by 20 percent
B. the sales forecast is revised upward by 15 percent
C. fixed order cost of an item increases as a percentage of purchase price
D. all of the above would cause average inventory holdings to decrease
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