Answer the Following Question(s) Using the Information Below

Answer the following question(s) using the information below:
The Wood Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items:
Annual demand is 10,000 packages per year. The purchase price per package is $16.
-Sandrington Ltd. operates a retail bicycle shop. Wheel covers are popular with customers. Sandrington purchases these covers for $48 (per pair) and expects to sell 5,000 pairs per year. Ordering costs are estimated at $180 per order and relevant insurance handling etc. costs are estimated at $0.30 per month. The company has established a 14% annual return on investment. At the EOQ quantity, Sandrington's total relevant inventory costs would be:

A) $2,546
B) $3,557
C) $735
D) $4,310
E) $6,467

Correct Answer:

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