Multiple Choice Questions on Calculate Variable cost at EOQ from following information Annual Consumption 6 000 units Ordering co........... for SEBI Grade A ( Officer) Exam Preparation

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Multiple Choice Questions

Calculate Variable cost at EOQ from following information Annual Consumption 6 000 units Ordering co...........

Costing - Phase (I & II) Basics of Cost Control and Analysis
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    Calculate Variable cost at EOQ from following information:

    Annual Consumption = 6,000 units

    Ordering cost= 60/- per order

    Purchase Price per unit= Rs. 10/-

    Carrying Cost= 20% per annum

    Rs. 1000/-

    Incorrect Answer

    Rs. 1200/-

    Correct Answer

    Rs. 600/-

    Incorrect Answer

    None of the above

    Incorrect Answer
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    Explanation:

    Economic Order Quantity (EOQ) is the quantity to be ordered at one time to minimize the overall variable cost i.e. total ordering cost and carrying cost. At this quantity, the carrying cost = ordering cost.

    It is calculated as: √ 2 (x) C (x) O (x) I

    In given problem, variable cost will be: √ 2 (x) 6000 (x) 60 (x) 2 = 1200/-

    By: Vikas Goyal
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