From the information given below calculate EOQ and the number of orders to be placed in a year if co...........

Costing - Phase (I & II) Basics of Cost Control and Analysis

From the information given below, calculate EOQ and the number of orders to be placed in a year if company follow EOQ policy:

Annual Consumption = 5,000 units

Ordering cost= 50/- per order

Purchase Price per unit= Rs. 10/-

Carrying Cost= 20% per annum

500 units; 10 orders

1000 units; 12 orders

500 units; 12 orders

Cannot be calculated.

In the given problem, EOQ= √ 2 (x) C (x) O/ I

=√ 2 (x) 5,000 (x) 50/ 2 = 500 units

Number of orders= 5000/500= 10 orders

Annual Consumption (C), Ordering cost (O) = 50/- per order, Carrying Cost (I)= 20% of 10 = 2

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can you plz explain this in detail

Ankur sharma

check now, I hope it's clear now