A company manufactures several components in batches. The following data relates to one component: Annual demand: 32,000 units Set-up cost per batch: ₹120 Annual rate of interest: 12% Cost of production per unit: ₹16 The

CS Executive · Cost and Management Accounting · PYQS · June 2015
A company manufactures several components in batches. The following data relates to one component: Annual demand: 32,000 units Set-up cost per batch: ₹120 Annual rate of interest: 12% Cost of production per unit: ₹16 The economic batch quantity is —
(A) 4,000 units
(B) 3,000 units
(C) 2,000 units
(D) 2,500 units.

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Batch Costing

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