In ABC Printing, Queen's Black Is a Popular Input with an Annual

In ABC Printing, Queen's black is a popular input with an annual demand of 50,000 gallons.ordering cost of $50 per order, and the holding cost is $5 per unit per year; the economic order quantity is 1000.Hence during the year, they used 1000 as the order quantity.An audit of the costs revealed that the true ordering cost was only $25 and the true holding cost was $10 per gallon per year.The correct order quantity would have been 500.How much did ABC lose due to incorrect cost information during the year?

A) 0
B) 1250
C) -1250
D) 500
E) Cannot be found without additional information.

Correct Answer:

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