Given the Following Information, What Is the Economic Ordering Quantity

question 52

Multiple Choice

Given the following information, what is the economic ordering quantity (EOQ) for Shinebird Textiles?
​Ordering costs = $40 per order
Carrying costs = 20% of purchase price
Purchase price (cost) = $10 per unit
Total sales for year = 1,000 units

• A)142 units
• B)200 units
• C)50 units
• D)90 units
• E)283 units

---

Definitions:

Split-off Point

Refers to the stage in a production process where joint products can be recognized as separate products.

Joint Processing Costs

Costs incurred in a production process that yields multiple products simultaneously, up to the split-off point.

Processing Further

Decision-making process regarding the additional refining or processing of products to enhance their value or marketability.

Intermediate Products

Goods that are used as inputs in the production of final products, not intended for end consumers.