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A company uses components at the rate of 500 units per month, which
are bought in at a cost of $1.20 each from the supplier. It costs $20 each
time to place an order, regardless of the quantity ordered.
The supplier offers a 5% discount on the purchase price for order
quantities of 2,000 items or more. The current EOQ is 1,000 units.
The total holding cost is 20% per annum of the value of stock held.
Required:
Should the discount be accepted?Do not waste your time simply setting me test questions to answer – because I will not!
You must have an answer in the same book in which you found the question, so if there is something in the answer that you are not clear about then certainly ask and I will help you!
I do not think that you can have been watching my free lectures, because everything needed for this question is explained in the lectures.
The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Thank you Sir, I got the question from Kaplan page 71,illustration 3 and the question has no formulae or answer, I have read a lot on EBQ and I have a bit of knowledge on the topic. is there a way I can search for specific topics on your free online lectures? how do I find free online lectures on EBQ?
I have found it, I have found the topic on EOQ free lecture. sorry for the inconveniences caused.
No problem. Do ask again if you are still not clear after watching the lectures.
If you watch the lectures (together with the free lecture notes) then you do not really need a text book.
The book you must have is a Revision Kit from one of the ACCA approved publishers. They contain lots of exam standard questions (together with answers and workings!!!) for practice, and practice at exam standard questions is vital to passing the exam.
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