Problemgreen thumb garden centers sells 240000 bags of lawn, Ask an Expert

Accounting

Problem:

Green Thumb Garden Centers sells 240,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,200 bags. Each bag costs Green Thumb $4, inventory carrying costs are 20 percent, and the cost of placing an order with its supplier is $25.

Required:

Question 1: What is the economic ordering quantity?

Question 2: What is the total inventory cost at the EOQ level?

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170544

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