GM Electronics expects to sell 800 alarm systems each month of 2022 at R4 000 each. The cost price of each alarm system is R2 000. The inventory holding cost of an alarm system is 1% of the unit cost price. The cost of placing an order for the alarm systems is estimated at R60.

GM Electronics expects to sell 800 alarm systems each month of 2022 at R4 000 each. The cost price of each alarm system is R2 000. The inventory holding cost of an alarm system is 1% of the unit cost price. The cost of placing an order for the alarm systems is estimated at R60.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 19PROB

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Question

Calculate the annual economic order quanitity from the information provided attached

GM Electronics expects to sell 800 alarm systems each month of 2022 at R4 000 each. The cost price of each
alarm system is R2 000. The inventory holding cost of an alarm system is 1% of the unit cost price. The cost of
placing an order for the alarm systems is estimated at R60.

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