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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › ACCA F2 Mock exam Question 27.
Dear Sir,
Could you please explain to me why the answer is 200 not 400?
I use the EOQ formula, which is ? 2x20x20,000/5 =400
Where Demand = 5000 x 4 (each quarter)= one year 20,000
I get answer 200 only if Demand in the formula is equal- 5000
Should it be demand per annum, which is 5000×4 – 20,000?
Thank you
In future please do not refer to questions in the mock exam just by question number. The reason is (as is explained on the page before the exam starts) that the questions are drawn at random from a large bank of questions. Every time you take the exam you are likely to get different questions, and so ‘question 27’ means nothing to me 🙂
However, the information for this question appears in two questions. One of the questions asks for the economic order quantity, and the answer is 400 units (and this is the answer that is marked as correct). The other question has the same information but asks for the minimum total of the inventory costs. For this the answer is 2,000 (and this is the answer that is marked as correct).
I have checked and although 200 is given as one of the choices for the first of the two questions, it is 400 that is given as the correct answer.