Economic order quantity (Appendix 7.2). The purchasing agent responsible for ordering chairs estimates that Folsom Furniture sells 30,000 chairs evenly throughout each year, that each order costs $15 to place, and that holding each chair in inventory for a year costs $4 per chair.
a. How many chairs should Folsom Furniture request in each order?
b. How many times per year should Folsom Furniture order chairs?
Text Book: Managerial Accounting: An Introduction to Concepts, Methods and Uses By Michael Maher, Clyde Stickney, And Roman Weil