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. LAMA Creations' cost may change if the order quantity is increased from 100 bundles to 200 bundles at a time. What is the cost difference between the carrying costs with orders of 100 bundles as compared to orders of 200 bundles?

A) $350.00
B) $225.00
C) $175.00
D) $0.00

Correct Answer:

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