Answer:
Total inventory procuring cost $ 12.000
Explanation:
Step 1. Given information. and Step 2. Formulas needed to solve the exercise.
To find out invencoty cost, we need to calculate EQO
EOQ = sqrt of (2 * ordering cost per order * total quantity required / carrying cost per order)
Total inventory procuring cost = Carrying cost per unit per year (EOQ/2) + Fixed order cost * no of times ordered
Step 3. Calculation. and Step 4. Solution.
EOQ = sqrt of (2 * 500 * 8.000 / 18) = 667 units.
Therefore no of times to be ordered = 8.000/667 = 11.99 = 12 times
Total inventory procuring cost = 18 (667/2) + 500 (8.000/667) = $ 12.000
Note
Total Inventory procuring Cost is the sum of the carrying cost and the ordering cost of inventory.
Answer:
D. are incurred even if nothing is produced.
Explanation:
There are primarily two types of costs, i.e. the variable cost and the fixed cost. The variable cost is the cost that varies when the level of production changes, while the fixed cost is the cost that remains unchanged whether the level of production changes or not
So, by the above explanation, we can conclude that the fixed cost can be incurred if there is nothing to be produced.
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Problem: Total of Leiff's online purchase
Given: $ 128 for video game
5.3% discount price of the video game
$4.75 shipping fee
15% promotion for more the $50 orders
Solution:
<span>Total = [(85% x 128 )+ (5.3% x 85% x 128) + 4.75]
</span>= 108.80 + 5.78 + 4.75
= <span>$119.32</span>
Costs are reduced because they are shared and also one firm may offer services that it has specialised in at reduced costs
