Question: please typing by a computer not hand to be clear answer thank you so much for waiting QUESTION 3: Electric spark Co., uses 60,000 of
please typing by a computer not hand to be clear answer thank you so much for waiting
QUESTION 3: Electric spark Co., uses 60,000 of component Zima. The cost of placing an order is estimated at $17.28 per order. The annual holding cost is 20% of the purchase price of $20 per unit. The following information is provided to you by the management accountant to use in your analysis: The Normal usage 200 units per day Maximum usage Minimum usage 280 units per day 120 units per day 20 to 30 days Reorder period Required: 1. Determine the EOQ using the equation method 2. Calculate the total cost of inventory per year, in case the company decided to use the EOQ. 3. Electric spark has been offered a 2 per cent discount on the cost if it places orders in quantities of 20,000. Discuss whether the company should accept the discount and place larger orders
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