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Determine ordering cost per order

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Reference no: EM132491

Question:

Shoogi Perak Limited is a manufacturer of pictures tubes used in assembling T.V sets. The subsequent are details of their operation during 2006. The expected demand for tubes is 1,000 tubes per month. Purchase price of each tube is RM60. The ordering cost which adds staffing cost, incurred by the purchasing departments at RM120 per order. The forwarding and freight cost per order is RM80. The company also needs to rent additional warehouse for storing the tubes at the rate of RM8 per tube. The breakage cost is related at 12% of the purchase price. Insurance and Taxes charged on the inventory are related at RM1.80 per tube. Determine ordering cost per order?

Reference no: EM132491

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