The following information applies to Krypton Corp. which supplies microscopes to laboratories throughout the country. Krypton purchases
Question:
The following information applies to Krypton Corp. which supplies microscopes to laboratories throughout the country. Krypton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation.
Annual demand(weekly demand=1/52 of annual demand) 14,000 units
Orders per year as per EOQ model 17
Lead time in days 16 days
Annual relevant carrying costs $3,500
What are the annual relevant ordering costs, assuming that relevant total costs are minimal?
Answer: $3,500
Note: How would I calculate the relevant ordering costs with this information? I noticed while doing other calculations that the relevant ordering costs and relevant carrying costs are always the same number, why is that? Thank you.
Expert Answer:
The relevant ordering costs can be calculated using the Economic Order Quantity EOQ model formula wh... View the full answer
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
