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Dear sir, I am doing the test but there’s a question.
A company uses 9,000 units of a component per annum. The component has a purchase price of $40 per unit and the cost of placing an order is $160. The annual holding cost of the component is equal to 8%of its purchasing price.
What is the EOQ of the component?
The answer is 949, but mine is 300.
You must be putting the wrong numbers into your calculator.
D = 9,000; Co = 160; Ch = 8% x 40 = 3.20
If you put these numbers into the formula, then EOQ = 949
oh, yeah! it’s 3.20, I mistook the number for 80%….I cant believe that I made such silly mistake and have calculated for 3times…..yeah! Thank you, sir:)
one more thing,sir.
Why there are no lectures about FIFO,LIFO methods and other lessons? cuz I’m using BPP which has lots of information to digest…but lectures here are only take the most important lessons,maybe? into account. I wonder if I should go through the whole BPP book again to know some details in case that I dont know the answers in the examination.Our lectures are what we cover on a normal 5 day course, which is more than enough to be able to pass the exams well.
FIFO and AVCO are covered in the F3 lecture on Inventories (they are examined more in Paper F3). LIFO is not covered in F3 (because it is not allowed for financial accounts). However, it is done step by step (s with AVCO) but always selling the newest items first.
The only book you really need in addition to our lectures is a Revision Kit. If you have watched all of our lectures, practiced all of the questions in the Revision Kit, and asked about any problems with them in this forum, then you should pass without difficulty.
BPP has a lot to look through which really frustrates me because it is less logic between chapters. The course note you give us is a lot more useful. I couldn’t be more grateful,sir. Thank you so so so much!:)
Since you have the Study Text, it is good to use just as a reference book. If you come to any lectures that you find difficult to understand, then maybe have a look at the relevant chapter in the book 🙂
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