Hi Mr Moffat. I have a question. For the EOQ formula, do we have to calculate for the whole year or just the one month. I am confused as for the demand you include the full 12 months but this is not the case for the order costs. Please can you explain?

You must buy a Revision Kit from one of the ACCA approved publishers because practice at exam standard question is vital if you are to pass the exam. You will find many more questions in the Revision Kit.

VC per unit (<480)=12000-10500/450-300=10 VC=10*300=3000 DC=10500-3000=7500 Above 480 VC falls 15%. So, for 520 units VC = 520*10*85%=4420 TC=4420+7500=11920

Good morning Sir, from the above question, EOQ of 1000 units= total of $10,600 while EOQ of 500 units= total of $600. so EOQ of 500 qualifies for optimal reorder quantity?

I don’t understand you – the EOQ is what comes from using the formula and is 500 units.

They currently order 1,000 each time, but that is not the economic (or optimal) order quantity and so obviously costs more (but you are not asked for the costs).

I do suggest that you watch my free lectures on inventory control.

Could you please explain on question number 3 how you calculated the Ch (soln. was .10 * 12) for the EOQ. I dint get it on how you reached on value 12.

You don’t need the price per unit for the formula. The formula needs the demand, the order cost, and the holding cost per unit – all of these are given in the question. The ‘2’ is in the formula as well!!!! (and the formula is given on the formula sheet).

Have you watched the free lectures? They are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well. There is not much point in attempting the tests unless you have watched the lectures 馃檪

As we explain throughout the website, you must buy a Revision Kit from one of the ACCA approved publishers if you are to pass the exam. They contain lots of exam standard questions to practice, and practice is vital.

kudzai96 says

Hi sir. I seem to be getting confused by question 2 and 4. Please assist me as to the relationship between ordering and holding cost. Thank you

arahnsathananthan says

Hi Mr Moffat. I have a question. For the EOQ formula, do we have to calculate for the whole year or just the one month. I am confused as for the demand you include the full 12 months but this is not the case for the order costs. Please can you explain?

John Moffat says

In the formula we use the order cost each time (nothing to do with months).

asaaeric1 says

Hello, please we don’t have examples of EOQ with discounts.

John Moffat says

No – it is only a quick test.

You must buy a Revision Kit from one of the ACCA approved publishers because practice at exam standard question is vital if you are to pass the exam. You will find many more questions in the Revision Kit.

lockdown says

hi i can’t seem to where i can download these qtion papers pdfs please help

John Moffat says

These tests are to be attempted online. They are not available as pdf’s – there is no reason for them to be 馃檪

oputoufiq09 says

VC per unit (<480)=12000-10500/450-300=10

VC=10*300=3000

DC=10500-3000=7500

Above 480 VC falls 15%.

So, for 520 units VC = 520*10*85%=4420

TC=4420+7500=11920

Please do correct me if I'm wrong 馃檪

breama says

please could you explain how we came about 4months in question 1 instead of 3 months

breama says

please ignore my question, i get it now. its a quarterly thing

John Moffat says

馃檪

kissme4560 says

Waawo nice got

5/5

John Moffat says

Great 馃檪

ketta says

5/5 for this test

John Moffat says

Congratulations 馃檪

John Moffat says

Please do not set test questions a comment on a lecture.

Ask in the Ask the Tutor Forum.

cindy7 says

Good morning Sir, from the above question, EOQ of 1000 units= total of $10,600 while EOQ of 500 units= total of $600. so EOQ of 500 qualifies for optimal reorder quantity?

John Moffat says

I don’t understand you – the EOQ is what comes from using the formula and is 500 units.

They currently order 1,000 each time, but that is not the economic (or optimal) order quantity and so obviously costs more (but you are not asked for the costs).

I do suggest that you watch my free lectures on inventory control.

pramodsasidharan says

Could you please explain on question number 3 how you calculated the Ch (soln. was .10 * 12) for the EOQ. I dint get it on how you reached on value 12.

John Moffat says

The question says that the holding costs are 0.10 per month.

The formula needs the holding cost per year, and there are 12 months in a year 馃檪

pramodsasidharan says

Thank you 馃檪

John Moffat says

You are welcome 馃檪

osmanaden1 says

For my question,

the EOQ in the MA2 and the EOQ in F2 are they same?

John Moffat says

The EOQ formula is obviously the same.

F2 also requires understanding of how to deal with quantity discounts, and also the EBQ.

sal2222 says

Question 3 did not have the price per u bit in the question. I don’t understand where the answer got 2 from

John Moffat says

You don’t need the price per unit for the formula.

The formula needs the demand, the order cost, and the holding cost per unit – all of these are given in the question.

The ‘2’ is in the formula as well!!!! (and the formula is given on the formula sheet).

Have you watched the free lectures? They are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.

There is not much point in attempting the tests unless you have watched the lectures 馃檪

alexmburu says

Please add more questions to cater for the rest of the concepts.you only have EOQ

John Moffat says

No – these are only ever meant to be short tests.

As we explain throughout the website, you must buy a Revision Kit from one of the ACCA approved publishers if you are to pass the exam. They contain lots of exam standard questions to practice, and practice is vital.

shujhon says

Hi, the questions don’t seem to match with the chapters in the notes?

Is this just me?

John Moffat says

You are right – it will be put right today 馃檪

ameera98 says

Can you plz explain the distribution of number of units as 500, 500 and 168 in the frst qs.

lann says

Why can’t I see the working to see whether my answers are correct

John Moffat says

Maybe you have a pop-up blocker enabled.

The workings appear when you submit your answer.