Cost of one order if you order in quantities equal to EOQ

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Reference no: EM132212382

Your family's house painting business has decided to try this "EOQ thing" you just learned. So you open the financials and note the following information:

Three-year average paint consumption: 3600 gallons per year

You use a small warehouse to hold your equipment and paint. From your cost accounting class, you estimate that your holding cost per gallon of paint is $2.05 per year.

Buying the materials needed requires more time than you thought. The part-time person whose only function is to do all of your buying says that she processes 1220 purchase orders per year and her average pay has been $19200 per year.

What is the total cost of one order if you order in quantities equal to the EOQ? (Your answer should have two decimal places)

Reference no: EM132212382

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