Question

In: Accounting

Given the following facts for the Histep Company: Differential costs per order $20 Annual requirement 1,000...

Given the following facts for the Histep Company:

Differential costs per order	$20
Annual requirement	1,000 units
Inventory carrying costs	$1.00 per unit per year
Purchase cost per unit	$10

REQUIRED:

a.	Complete the following chart:

Average

Annual Orders

Order Size

No. of Units in Inventory

Inventory Carrying Costs

Order Costs

Total Costs

2

4

5

8

10

b.	Using trial and error, which order size should be used?

c.	Using the economic order quantity formula, what is the optimal number of units in each order?

Expert Solution

ekkarill92 answered 2 years ago

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