What is the economic ordering quantity for chips?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 8EB: How many units are estimated to be sold if Kino, Inc., has planned production of 750,000 units, a...
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Hi Tech Corporation (HTC) expects to order 295,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate.  Fixed ordering costs are $300 per order; the purchase price per chip is $32; and the firm’s inventory carrying costs is equal to 18 percent of the purchase price.  What is the economic ordering quantity for chips? 

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