COST ACCOUNTINGCALCULATION FOR TOTAL ANNUAL COST inventory of 800 components. The annual cost of holding one component incomponents, which is the Economic Order Quantity. The company holds a bufferyear. Each order placed with the supplier of the components is for 1,6007. A manufacturing company uses 28,000 components at an even rate during thenventory of 800 components. The annual cost of holding one component stinventory is €3.50. Calculate:a) The Annual Cost of holding inventory of the componentb) The Annual Cost of ordering inventory of the componentThe Total Annual Cost associated with inventory of the componentc)

Calculation of annual holding inventory of the component = [ Buffer inventory + ( EOQ/2 ) ] x…

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Business

Accounting

OST ACCOUNTING CALCULATION FOR TOTAL ANNUAL COST

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 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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COST ACCOUNTING

CALCULATION FOR TOTAL ANNUAL COST

inventory of 800 components. The annual cost of holding one component in
components, which is the Economic Order Quantity. The company holds a buffer
year. Each order placed with the supplier of the components is for 1,600
7. A manufacturing company uses 28,000 components at an even rate during the
nventory of 800 components. The annual cost of holding one component st
inventory is €3.50. Calculate:
a) The Annual Cost of holding inventory of the component
b) The Annual Cost of ordering inventory of the component
The Total Annual Cost associated with inventory of the component
c)

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