COST ACCOUNTING HOMEWORK (EOQ) HELP WITH ANSWERS. NEED EXPLANATION!!?

Posted on 2013-12-19 11:31:00 in Accounting by KENNIE

Hello,



I'm preparing for an exam on wed and i'm using a test bank. I have the answer to these question but I do not have an explanation. I need someone to show me the work. i got both questions wrong. I NEED TO KNOW WHY ITS THE ANSWER.Please show work



The following information applies to Labs Plus, which supplies microscopes to laboratories throughout the country. Labs Plus purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation.

Annual demand (weekly demand=1/52 of annual demand) 20,800 units

Orders per year 20

Lead time in days 15 days

Cost of placing an order $100



13) What are the annual relevant carrying costs, assuming each order was made at the

economic-order-quantity amount?

A) $200

B) $1,000

C) $2,000

D) $6,000

Answer: C



14) What is the economic order quantity assuming each order was made at the economic-order-quantity amount?

A) 15 units

B) 20 units

C) 780 units

D) 1,040 units

Answer: D

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