# Costs and Revenues Question

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Registered Posts: 155 Beyond epic contributor 🧙‍♂️
Hi All,

My friend needs help answering the attached question and as I haven't done Costs and Revenues yet I have no idea!

Thank you!

• Registered Posts: 2,525 Beyond epic contributor 🧙‍♂️
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Hello Molly

Not sure exactely what they need help with as the answer is given.

Do they need an explanation of what EOQ is? Are they remembering to calculate the square root once they have completed the calculation.

JC
~ An investment in knowledge always pays the best interest ~
Benjamin Franklin
• Registered Posts: 302
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The formula is correct.

The Square root of: 2 x the purchase cost (£3.60) x the annual stock amount (112,500) divided by the yearly holding cost per unit (£1.80) = 670.82
• Registered Posts: 110 Beyond epic contributor 🧙‍♂️
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Just to further on what mark said in case you get confused, he put x purchase cost, this is the cost of makin an order such as delivery, admin etc and not the cost of the items, don't mean too patronise I just read it like that
• Registered Posts: 155 Beyond epic contributor 🧙‍♂️
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Hi All,

Thanks for your help. Will show my friend tomorrow morning. She has her own account now so will point her in the right direction if she has any further questions :001_smile: