Koala Blue, a retailer of bed and bath linen, sells 234,000 packages of Mona Lisa designer sheets
Question:
REQUIRED
1. Complete the preceding table for Liv Carrol. What is the EOQ? Comment on your results.
2. Mona Lisa is about to introduce a Web-based ordering system for its customers. Liv Carrol estimates that Koala Blues ordering costs will be reduced to $49 per purchase order. Calculate the new EOQ and the new annual relevant costs of ordering and carrying inventory.
3. Liv Carrol estimates that Koala Blue will incur a cost of $2,000 to train its two purchasing assistants to use the new Mona Lisa system. Help Liv Carrol present a case to upper management showing that Koala Blue will be able to recoup its training costs within the first year of adoption.
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ