Quarterly consumption of materials: 2,000 Kgs. Cost of placing an order: ₹50 Cost per unit: ₹40 Storage and other carrying costs: 8% of average inventory The economic order quantity and number of orders to be placed per

CS Executive · Cost and Management Accounting · PYQS · June 2016
Quarterly consumption of materials: 2,000 Kgs. Cost of placing an order: ₹50 Cost per unit: ₹40 Storage and other carrying costs: 8% of average inventory The economic order quantity and number of orders to be placed per quarter of the year will be —
(A) 400 Kgs. and 5 orders
(B) 500 Kgs. and 4 orders
(C) 500 Kgs. and 12 orders
(D) 400 Kgs. and 6 orders.

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Inventory Management

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