Solved: Illustrate about the eoq model, Accounting Basics

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Illustrate about the eoq model

Problem:

Tiger Corp purchases 1,200,000 units per year of one component. The fixed cost per order is $25. The annual carrying cost of the item is 27% of its $2 cost.

a) Determine the EOQ under each of the following conditions: (1) no changes, (2) order cost of zero, and (3) carrying cost of zero.

b) What do your answers illustrate about the EOQ model? Explain?

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Accounting Basics: Illustrate about the eoq model

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Accounting Basics: Illustrate about the eoq model

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