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Warren Enterprises Expects 20,000 Unit Sales, Has Ordering Costs of $20

question 39

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Warren Enterprises expects 20,000 unit sales, has ordering costs of $20 per order, carrying costs of $1.00 per unit, and desires to keep 100 units in safety stock. Assuming level production, what should be its average inventory?

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Definitions:

Activity Base

A measure used for allocating costs to cost objects based on the number of transactions or events that take place in the process of providing a service or manufacturing a product.

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