PROBLEM 1 - ABNER COMPANY
a. EOQ √ 2CN/K
√ 2(200)(3,600)/25
EOQ 240
b. No. of Orders = No. of units required annually / order size
3,600/ 240
No. of Orders 15
c. Average Invetory = Order size / 2
=
Average Invetory 120
d. Total Carrying Cost = Average Inventory x Annual carrying cost per unit
= 120 x 25
Total Carrying Cost 3000
Total Ordering Cost = No. of orders x cost of order
= 15 x 200
Total Ordering Cost 3000
PROBLE 2 - OLIVE CORPORATION
a. EOQ √ 2CN/K
√ 2(15)(16,000)/3
EOQ 400
Total Order Average
Order Size No. of Orders Cost per Order
b. Cost Inventory
100.00 160.00 15.00 2400.00 50.00
200.00 80.00 15.00 1200.00 100.00
400.00 40.00 15.00 600.00 200.00
1600.00 10.00 15.00 150.00 800.00
6400.00 2.50 15.00 37.50 3200.00
Carrying Cost per Total Carrying
Total Cost
Unit Cost
3.00 150.00 2550.00
3.00 300.00 1500.00
3.00 600.00 1200.00
3.00 2400.00 2550.00
3.00 9600.00 9637.50
, PROBLEM 3 - X, Y, and Z Freight = 1,620
RELATIVE PESO
Cost Freight Total Pound Cost/pound
X 11,250.00 450 11,700.00 4,500.00 2.6
Y 13,500.00 540 14,040.00 6,000.00 2.34
Z 15,750.00 630 16,380.00 7,500.00 2.184
40,500.00 1,620.00 42,120.00 18,000.00
RELATIVE WEIGHT
Weight Freight Cost Total Cost Cost/pound
X 4,500.00 405 11,250.00 11,655.00 2.59
Y 6,000.00 540 13,500.00 14,040.00 2.34
Z 7,500.00 675 15,750.00 16,425.00 2.19
18,000.00 1,620.00 40,500.00 42,120.00
PROBLEM 4 - MAXIE COMPANY
RECORDED AT GROSS
Materials 64,800
Accounts Payable 64,800
20/10/10 100,000
20% 80000
10% 72,000 8000
10% 64,800 7200
RECORDED AT NET
Materials 63,504
Accounts Payable 63,504
20/10/10 100,000
20% 80000
10% 72,000 8000
10% 64,800 7200
2% 63,504 1296
PROBLEM 5 - HEAVEN & EARTH COMPANY
January 1 Balance on hand, 1,000 units at P4.00 each
a. EOQ √ 2CN/K
√ 2(200)(3,600)/25
EOQ 240
b. No. of Orders = No. of units required annually / order size
3,600/ 240
No. of Orders 15
c. Average Invetory = Order size / 2
=
Average Invetory 120
d. Total Carrying Cost = Average Inventory x Annual carrying cost per unit
= 120 x 25
Total Carrying Cost 3000
Total Ordering Cost = No. of orders x cost of order
= 15 x 200
Total Ordering Cost 3000
PROBLE 2 - OLIVE CORPORATION
a. EOQ √ 2CN/K
√ 2(15)(16,000)/3
EOQ 400
Total Order Average
Order Size No. of Orders Cost per Order
b. Cost Inventory
100.00 160.00 15.00 2400.00 50.00
200.00 80.00 15.00 1200.00 100.00
400.00 40.00 15.00 600.00 200.00
1600.00 10.00 15.00 150.00 800.00
6400.00 2.50 15.00 37.50 3200.00
Carrying Cost per Total Carrying
Total Cost
Unit Cost
3.00 150.00 2550.00
3.00 300.00 1500.00
3.00 600.00 1200.00
3.00 2400.00 2550.00
3.00 9600.00 9637.50
, PROBLEM 3 - X, Y, and Z Freight = 1,620
RELATIVE PESO
Cost Freight Total Pound Cost/pound
X 11,250.00 450 11,700.00 4,500.00 2.6
Y 13,500.00 540 14,040.00 6,000.00 2.34
Z 15,750.00 630 16,380.00 7,500.00 2.184
40,500.00 1,620.00 42,120.00 18,000.00
RELATIVE WEIGHT
Weight Freight Cost Total Cost Cost/pound
X 4,500.00 405 11,250.00 11,655.00 2.59
Y 6,000.00 540 13,500.00 14,040.00 2.34
Z 7,500.00 675 15,750.00 16,425.00 2.19
18,000.00 1,620.00 40,500.00 42,120.00
PROBLEM 4 - MAXIE COMPANY
RECORDED AT GROSS
Materials 64,800
Accounts Payable 64,800
20/10/10 100,000
20% 80000
10% 72,000 8000
10% 64,800 7200
RECORDED AT NET
Materials 63,504
Accounts Payable 63,504
20/10/10 100,000
20% 80000
10% 72,000 8000
10% 64,800 7200
2% 63,504 1296
PROBLEM 5 - HEAVEN & EARTH COMPANY
January 1 Balance on hand, 1,000 units at P4.00 each
