Yearly use 4,800 units, Rs 150 per order, Rs 4 carrying per unit a year. Economic order size?
A300 units
B480 units
C1,200 units
D600 units
Answer & Solution
Correct answer: D. 600 units
The square root of 2 x 4,800 x 150 / 4 is the square root of 360,000, which is 600 units.
Keep practising Inventory Valuation
Browse all Inventory Valuation questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
The ABC concept is based on whose law?An item needs 500 units a year at Rs 40 each. What is its annual usage value?After computing usage values, items are arranged in which order?In ABC analysis, how is an item's annual usage value computed?ABC class thresholds are what?Class B holds 30% of items. About what share of annual consumption value does it hold?Half of all items fall in class C. Roughly what share of consumption value do they hold?ABC analysis resembles which principle, where few items carry most value?