Brady Sporting Goods Incorporated buys baseballs at ($ 20) per dozen from its wholesaler. Brady will sell
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Brady Sporting Goods Incorporated buys baseballs at \(\$ 20\) per dozen from its wholesaler. Brady will sell 36,000 dozen baseballs evenly throughout the year. Brady desires a \(10 \%\) return on its inventory investment. In addition, rent, insurance, taxes, etc., for each dozen baseballs in inventory is \(\$ .40\). The administrative cost involved in handling each purchase order is \(\$ 10\).
{Required:}
(1) What is the economic order quantity?
(2) Assuming that Brady ordered in order sizes of 800 dozen evenly throughout the year, what would be the total annual inventory expenses to sell 36,000 dozen baseballs?
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Related Book For
Cost Accounting For Managerial Planning Decision Making And Control
ISBN: 9781516551705
6th Edition
Authors: Woody Liao, Andrew Schiff, Stacy Kline
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