Inventory Management, Just in Time and Costing Methods
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- Inventory Management, Just in Time and Costing Methodsaccounting-mcqs › cost-accounting-mcqs › inventory-management-just-in-time-and-costing-methods
- Published
- 10 May 2023
- Last updated
- 28 May 2026
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Given an annual demand of 25,000 units, an ordering cost of $210 per order, and a holding cost of $25 per unit, what is the Economic Order Quantity (EOQ)?
Multiple choice question for Inventory Management, Just in Time and Costing Methods. Select an option, then review the explanation below.
Explanation
The EOQ formula is calculated as √(2 * Demand * Ordering Cost / Holding Cost). Substituting the values: √(2 * 25,000 * 210 / 25) results in approximately 648 units, making option B the correct answer.
More Inventory Management, Just in Time and Costing Methods MCQs
Practice related questions from the same subject.
- 1.When combining relevant ordering expenses with relevant holding expenses, what is the resulting calculation called?
- 2.To determine ____________, you multiply the purchase order lead time by the quantity of units sold within a given time period.
- 3.To determine ___________, the reorder point is divided by the quantity of units sold per time period.
- 4.In the manufacturing process, what is the term for the phase when accounting journal entries are recorded?
- 5.Which costing method involves skipping certain journal entries in the accounting process?