LAMA Creations Creates Sweaters Using the Wool of the Llama

LAMA Creations creates sweaters using the wool of the Llama. The wool used in the manufacturing process is ordered by the bundle. LAMA requires 1,200 bundles of Llama wool per year and places orders of 100 bundles at a time. The cost of ordering is $80.00 per order and the carrying cost per bundle is $3.50. What are LAMA Creations' total costs of managing inventory?

A) $960.00
B) $1,135.00
C) $1,225.00
D) $175.00

Correct Answer:

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