Question 2 Phyllis Limited produces a product called SOMUAH The manufacture of this product requires raw materials per month of 1,000kg and this is even throughout the year. The ordering cost per order is GHC 250 and each kilogram costs GHC 25.00. Annual holding cost is estimated at 20% of the cost of a kilogram of material Required: Calculate the following: a) The Economic Order Quantity (EOQ) (4 marks) b) Annual Inventory Cost (3 marks)

Question 2 Phyllis Limited produces a product called SOMUAH The manufacture of this product requires raw materials per month of 1,000kg and this is even throughout the year. The ordering cost per order is GHC 250 and each kilogram costs GHC 25.00. Annual holding cost is estimated at 20% of the cost of a kilogram of material Required: Calculate the following: a) The Economic Order Quantity (EOQ) (4 marks) b) Annual Inventory Cost (3 marks)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000
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Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
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