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Accounting

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(Comprehensive EOO calculations) Knutson Products inc, is involved in the production of airplane parts and has the following inventary, carrying, and storage costs 1. Ordens must be placed in round lots of 100 units. 2. Annual unit usage is 400,000 . (Assume a 50 -week year in your calculations.) 3. The carrying cost is 15 percent of the purchase price. 4. The purchase price is 540 por unit. 5. The ordaring cont is $500 per ordor. 7. The delivery time is 5 woek. Given the foregoing informabor: a. Determine the optimal EOQ lovel. b. How many orders will be placed annually? c. What is the imertory order point? (That is, at what level of inventory should a new order be placed?) d. What is the avecage inventory level? e. What would happen to the EOQ if annual unit sales doubled (all other unit costs and safety slocks remaining constant?? What is the elasticity of EOQ with rospect to sales? (That is, What is the percentage change in EOQ divided by the percentage change in sales?) if carrying costs double, what will happen to the EOO level? (Assume the original sales level of 400,000 units.) What is the elasticity of EOQ with respect to carrying costs? 9. It the ordering couts double, what will happen to the level of EOQ? (Again, assume orignal leveis of sales and carrying costs.) What is the elasticity of EOQ with respect to ordering costa

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