costing material problem

Cost Accounts 786 views 1 replies

Khushi

CA & CS Final

1367 Points Joined July 2008

Q1. the annual demand for an item of stock is 45 units. the item costs rs 200 per unit to purchase. holding costs are 15% of the unit costs per annum and the ordering costs are rs. 300 per order. the supplier offers a 2% discount for orders in excess of 60 units and a discount of 5% for orders in excess of 90 units. what is the economic lot size?

Replies (1)

Guest

hey solve it using tabular method you ll be able to solve it. assign lot size using trial and error method.the lot where the total cost represented by total ordering cost , total material cost and total carrying is lowest, it is the economic lot size