Wing Corporation’s annual carrying costs are 25 percent of the inventory value. The product cost is $65 a unit. The cost of placing an order is $100, and the EOQ is 785 units. If the corporation plans to sell 50,000 units next year, what should be the total annual ordering and carrying costs?
A. $12,748
B. $31,882
C. $6,442
D. $2,506,378
Answer:A
Wing Corporation’s annual carrying costs are 25 percent of the inventory value. The product cost is $65 a unit. The cost of placing an order is $100, and the EOQ is 785 units. If the corporation plans to sell 50,000 units next year, what should be the total annual ordering and carrying costs?
A. $12,748 B. $31,882 C. $6,442 D. $2,506,378