Calculate the eoq, Managerial Accounting

Assignment Help:

Calculate the EOQ

An agent supplies 1000 units per calendar month (PCM) OF A PRODUCT TO CONSUMER. The cost per unit is £175 and the amount cost of storage space is £40. Associated cost with Ordering/Re-ordering is £35 per order and interest rates are constant at 12.5% per year.

1. Calculate the annual holding cost of one unit

2. Calculate the EOQ.

3. Calculate the  annual number of re-orders necessary to satisfy the EOQ.

4. Draw a graph containing total cost, holding cost and re-ordering cost against order quantity and comment upon it. Use an order quantity range from 1 to 40 on your horizontal axis

5. Suppose now the EOQ was 3 unit less than your calculate EOQ. Calculate the cost penalty for deviating from the EOQ value by these 3 units.


Related Discussions:- Calculate the eoq

Accounting Ratios, Explain TWO limitations of using accounting ratios to as...

Explain TWO limitations of using accounting ratios to assess the performance of a firm and suggest how each limitation may be improved

Product mix decision when capacity constraints exist, a certain company mak...

a certain company makes 3 products A,B and C and they use the same raw material zhong.details about each product is as follows.production units are 10 000 for A,8 000 for B,12 000

Identification of decision packages - zero base budgeting, Identification o...

Identification of decision packages - Zero base budgeting Each manager should break down his decision unit into smaller decision packages. Top manager may lay down the minimum

International transfer pricing-compliance and documentation, International ...

International transfer pricing Transfer pricing is a perennial issue, within the international tax community (Richard Casna, Accounting and Business, in the year February 1988)

2010, how to journalize entry. purchased $150,000 of raw materials on accou...

how to journalize entry. purchased $150,000 of raw materials on account, terms of 2/20; n/30

Profi t Planning, SK 2 Chapter 10: Master budgeting Objective How organisat...

SK 2 Chapter 10: Master budgeting Objective How organisations strive to achieve their financial goals by preparing a number of budgets that together form an integrated business pla

Total annual inventory cost , Ross White's machine shop uses 2,500 brackets...

Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant by the year. These brackets are purchased from a supplier 100 miles

The least-cost method, The least-cost method The process is described a...

The least-cost method The process is described as follows: Assign as much as possible to the variable with the least unit cost in the whole tableau. (Ties are broken randomly).

What is activity ratio, What is Activity ratio Funds are invested in se...

What is Activity ratio Funds are invested in several assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume

Describe breadth indicators and market sentiment indicators, Describe bread...

Describe breadth indicators and market sentiment indicators? 1. Distinguish among technical and fundamental analysis. As well explain essential concepts underlying chart analys

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd