Burley Company Has the Following Information Available Concerning One of Its

question 46

Multiple Choice

Burley Company has the following information available concerning one of its inventory items:
$\begin{array}{lr}\text { Cost of placing an order}&\$ 50.00\\\text {Unit carrying cost per year }& \$ 2.00 \\\text { Annual unit demand}&3,200\\\text {Safety stock }&80\\\text {Average daily demand }&10\\\text {Normal lead time in days }&12\\\end{array}$

-Refer to the figure.What is the economic order quantity for this item?

• A)16 units
• B)400 units
• C)500 units
• D)160,000 units

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Definitions:

Diluted Earnings Per Share

A financial metric that calculates the quality of a company's earnings per share if all convertible securities were exercised.

Stock Dividend

A stock dividend is a distribution of additional shares to shareholders, proportionate to their existing holdings, instead of cash.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back.

Cumulative Preferred Stock

Cumulative Preferred Stock is a type of preferred shares that have a provision entitling shareholders to receive dividends that were missed in the past before any dividends are paid to common shareholders.