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Where does 3,000/2 come from? I know .2 comes from 20 percent of the manufacuring cost

Economic Production Quantity (EPQ) Model Hermit Company manufactures a line of walnut office products. Hermit executives estimate the demand for the double walnut letter tray, one of the company's products, at 6,000 units each year. The letter tray sells for $80 per unit. The costs relating to the letter tray are estimated to be as follows for 2018 : 1. Standard manufacturing cost per letter tray unit $50.00 2. Costs to initiate a production run- $300.00 3. Annual cost of carrying the letter tray in inventory -20 percent of standard manufacturing cost. In recent years, Hermit Company has scheduled the production for the letter tray in two equal production runs. The company is aware that the economic production quantity (EPQ) model can be employed to determine the optimum size for production runs. The EPQ formula for determining the optimum production quantity is shown below. EPQ=2(carryingcostperunit)(annualdemand)(costperrun) Required: Calculate the expected annual cost savings Hermit Company could experience if it employed the economic production quantity (EPQ) model to determine the number of production runs which should be initiated during the year for the manufacture of the double walnut letter trays. H=02HBPQZPQ=C2DPPerPrountinRunRelevantCarrjiycostPenUnitcursentProporedproductunrars.ZpQ$1026080100300000/2=L3000unitsV=360,00=600knN=$600ts30010=3000 Economic Production Quantity (EPQ) Model Hermit Company manufactures a line of walnut office products. Hermit executives estimate the demand for the double walnut letter tray, one of the company's products, at 6,000 units each year. The letter tray sells for $80 per unit. The costs relating to the letter tray are estimated to be as follows for 2018 : 1. Standard manufacturing cost per letter tray unit $50.00 2. Costs to initiate a production run- $300.00 3. Annual cost of carrying the letter tray in inventory -20 percent of standard manufacturing cost. In recent years, Hermit Company has scheduled the production for the letter tray in two equal production runs. The company is aware that the economic production quantity (EPQ) model can be employed to determine the optimum size for production runs. The EPQ formula for determining the optimum production quantity is shown below. EPQ=2(carryingcostperunit)(annualdemand)(costperrun) Required: Calculate the expected annual cost savings Hermit Company could experience if it employed the economic production quantity (EPQ) model to determine the number of production runs which should be initiated during the year for the manufacture of the double walnut letter trays. H=02HBPQZPQ=C2DPPerPrountinRunRelevantCarrjiycostPenUnitcursentProporedproductunrars.ZpQ$1026080100300000/2=L3000unitsV=360,00=600knN=$600ts30010=3000