COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Calculate EOQ (approx.) from the following details:Annual Consumption:24000 units Ordering cost:Rs. 10 per order Purchase price:Rs. 100 per unitCarrying cost:5%
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310
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400
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290
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300
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Explanation:
Detailed explanation-1: -To calculate the economic order quantity, you will need the following variables: demand rate, setup costs, and holding costs. The formula is: EOQ = square root of: [2(setup costs)(demand rate)] / holding costs.
Detailed explanation-2: -divided by 2 (because throughout the year, on average the warehouse is half full).
There is 1 question to complete.