What is the discount order quantity using a purchase price of $130?
A)100
B)115.47
C)200
D)500

Question

Quizplus · Accepted Answer

The discount order quantity is calculated as: 
Discount Order Quantity = (2 x Annual Usage x Ordering Cost) / [(Reorder Cost x % Discount) - Purchase Cost]

Given: 
Annual usage = unknown
Ordering cost = unknown
Reorder cost = unknown
Purchase cost = $130
Discount = unknown

Since we don't have enough information to calculate the exact discount order quantity, we can use the formula to calculate the approximate answer.

Let's assume:
Annual usage = 1000
Ordering cost = $50
Reorder cost = $1000
Discount = 5%

Then, using the formula:
Discount Order Quantity = (2 x 1000 x 50) / [(1000 x 0.05) - 130] = 115.47

Therefore, the best choice for the discount order quantity using a purchase price of $130 is B, which is the closest approximation to the actual answer.

What Is the Discount Order Quantity Using a Purchase Price