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Eoq 1

The document provides formulas and examples for calculating Economic Order Quantity (EOQ) based on various parameters such as annual consumption, ordering costs, and carrying costs. Additionally, it outlines two financial plans for raising capital and calculates Earnings Per Share (EPS) for each plan. Lastly, it includes instructions for preparing a stores ledger account using both Simple Average and FIFO methods.

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8 views4 pages

Eoq 1

The document provides formulas and examples for calculating Economic Order Quantity (EOQ) based on various parameters such as annual consumption, ordering costs, and carrying costs. Additionally, it outlines two financial plans for raising capital and calculates Earnings Per Share (EPS) for each plan. Lastly, it includes instructions for preparing a stores ledger account using both Simple Average and FIFO methods.

Uploaded by

vbollam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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INVENTORY

ECONOMIC ORDER QUANTITY

EOQ=
√2 AO
C

(EOQ)= Economic Order Quantity


A= Annual consumption
C = Carrying costs
O= Ordering Cost

Number of orders = A/ EOQ


Odering cost= No of orders* ordering cost
Carrying cost = ½* EOQ* Carrying cost
Purchasing cost = Annual Demand *Rate

Calculate Economic Order Quantity (EOQ) from the following:


Annual consumption 6,000 units
Cost of ordering Rs. 60
Carrying costs Rs. 2

From the following particulars, calculate the Economic Order Quantity


(EOQ):
Annual requirements 1,600 units
Cost of materials per units Rs. 8
Cost of placing and receiving one order: Rs. 100
Annual carrying cost for inventory value 10%

Calculate EOQ from the following?


Consumption during the year = 450 units
Ordering cost Rs. 50 per order
Carrying cost 6 per Unit
Selling Price per unit Rs. 20

From the figures given below, calculate Economic Order Quantity (EOQ)
and Total cost at EOQ?
Total consumption of material per year 10,000 kgs
Buying cost per order Rs. 50
Unit cost of material Rs. 2 per kg
Carrying and storage cost 8%

Calculate EOQ from the following?


Consumption during the year = 8000 units
Ordering cost Rs. 200 per order
Carrying cost 20%
Selling Price per unit Rs. 400

7)It has decided to raise Rs.500, 000 of Additional capital funds


and has identified two plans. The information is as follows:
Present capital structure- 30,000Equity shares of Rs.10/-
each
- 10%Bonds of 20, 00,000
Current EBIT: Rs.17, 00,000 Current EPS:Rs.2.5/- Tax Rate-
50%Current marketprice-25/-
There are two financial plans:
Plan-1: 20,000 Equity shares @25/-per share
Plan-2: 12% Debentures of Rs/-5, 00,000
Sol: Calculation of EPS For different plans:

Plan 1 Plan 2
Existing
No. of Equity shares 30,000 30,000
Interest on
bonds@10% 2,00,000 2,00,000
New
Equity share capital 5,00,000
Debentures@12% 5,00,000

EBIT 17,00,00 17,00,00


A 0 0
(2,00,000 (2,60,000
(Interest) B ) )
EBT 15,00,00 14,40,00
(A-B)C 0 0
(Tax) @50%
D 7,50,000 7,20,000
EAT
(C-D)E 7,50,000 7,20,000
No of equity
shares F 50,000 30,000
EPS E/F 15 24
Date - Quantity Rate per unit Rs.

1-3-2015 2000 units 20

18-3-2015 3000 units 18

30-3-2015 1000 units 16

Issues :-

Date - Quantity

4-3-2015 1000 unis

10-3-2015 500 units

22-3-2015 2500 units

31-3-2015 1000 units

From the following particulars, prepare stores ledger account

using (a) Simple Average Method, and (b) FIFO Method of

pricing issues.

January 2016,

2 purchased 400 units @ Rs. 40 per unit

4 purchased 500 units @ Rs.50 per unit

6 Issued 200 units

7 purchased 600 units @ Rs. 60 per unit

10 Issued 400 units


15 Issued 100 units

18 Issued 200 units

24 purchased 450 units @Rs. 55 per unit

31 Issued 250 units

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