Question
The KMT Corporation determines the manufacturing cost per order of a raw material is P25. The company expects to use P50,000 of this material in
The KMT Corporation determines the manufacturing cost per order of a raw material is P25. The company expects to use P50,000 of this material in the coming year. Its carrying charge is 10% of inventory. Determine the following:
Required:
1.Economic order quantity in pesos
2.Number of times the raw material be ordered in the coming year
3.Average inventory
4.Total relevant inventory costs at EOQ
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the economic order quantity EOQ and related costs well use the following formulas 1 Eco...
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Step: 2
Step: 3
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
