Aravan Company purchases 4,000 units of Product Beta each year in lots of 400 units per order.
Question:
Aravan Company purchases 4,000 units of Product Beta each year in lots of 400 units per order. The cost of placing one order is $20, and the cost of carrying one unit of product in inventory for a year is $4.
Required:
1. How many orders for Product Beta does Aravan place per year?
2. What is the total ordering cost of Beta per year?
3. What is the total carrying cost of Beta per year?
4. What is the total cost of Aravan’s inventory policy for Beta per year?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
Question Posted: