Your company needs to ship a large piece of construction equipment that costs about $500,000 to a customer across the country.Shipping by rail costs $3,000 and will take eight days.Your company uses 20 percent to determine the annual inventory carrying cost.What are the approximate total costs of shipping and in-transit inventory? (Use 365 days as the number of days in a year.)
A)$3,000.
B)$2,192.
C)$5,192.
D)$10,000.

Question

Quizplus · Accepted Answer

Shipping cost: $3,000 
In-transit inventory: (8/365) * $500,000 * 20% = $2,192 
Total cost: $3,000 + $2,192 = $5,192

Your Company Needs to Ship a Large Piece of Construction