A Firm Wants to Develop a Level Material Use Schedule

A firm wants to develop a level material use schedule based on the following data. What should be the setup cost?
$\begin{array}{|l|l|}\hline\text { Desired lot size: } & 60 \\\hline \text { Annual demand: } & 40,000 \\\hline \text { Holding cost: } & \$ 20 \text { per unit per year } \\\hline\text { Daily production rate }&320\\\hline\text { Work days per year: }&250\\\hline\end{array}$

A) $0.45
B) $4.50
C) $45
D) $450
E) $500

Correct Answer:

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