Franklin Company purchases 4,500 units of Widgelets each year in lots of 500 units per order. The
Question:
Franklin Company purchases 4,500 units of Widgelets each year in lots of 500 units per order. The cost of placing one order is $22, and the cost of carrying one unit of product in inventory for a year is $8.80.
Required:
1. What is the EOQ for Widgelets?
2. How many orders for Widgelets will Franklin place per year under the EOQ policy?
3. What is the total annual ordering cost of Widgelets under the EOQ policy?
4. What is the total annual carrying cost of Widgelets under the EOQ policy?
5. What is the total annual cost of Franklin's inventory policy for Widgelets under the EOQ policy?
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1 Economic Order Quantity EOQ Sqrt 2 x A x O C Where ...View the full answer
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Related Book For 
Cornerstones of Managerial Accounting
ISBN: 978-0176721237
3rd Canadian edition
Authors: Maryanne Mowen, Don Hanson, Dan Heitger, David McConomy, Bradley Witt, Jeffrey Pittman
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