Annual production of Product X is 400,000 annually. Each unit of Product X requires 2.5 units of material J. Product X is sold for 500 per unit and its total manufacturing cost is 300. Material J is purchased at 60 per unit. Carrying cost per unit of material J is 1 per unit while the ordering cost is 500 per order. How any units of material j shall the company order each time to minimize total relevant cost of inventories? a. 31,623 b. 20,000 c. 30,263 d. 26,336 e. None of these
Annual production of Product X is 400,000 annually. Each unit of Product X requires 2.5 units of material J. Product X is sold for 500 per unit and its total manufacturing cost is 300. Material J is purchased at 60 per unit. Carrying cost per unit of material J is 1 per unit while the ordering cost is 500 per order. How any units of material j shall the company order each time to minimize total relevant cost of inventories? a. 31,623 b. 20,000 c. 30,263 d. 26,336 e. None of these
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...
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- Annual production of Product X is 400,000 annually. Each unit of Product X requires 2.5 units of material J. Product X is sold for 500 per unit and its total
manufacturing cost is 300. Material J is purchased at 60 per unit. Carrying cost per unit of material J is 1 per unit while the ordering cost is 500 per order. How any units of material j shall the company order each time to minimize total relevant cost of inventories?
a. 31,623
b. 20,000
c. 30,263
d. 26,336
e. None of these
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