Sarah's Computer City sells 5,000 boxes of CD -RW compact discs per year. She determined that she pays $50 to process an order for discs. Her purchase price is $6 for each box of discs and she has determined that storage costs for one year are 25 percent of the purchase price. What is her approximate total ordering cost?
A) $611
B) $43
C) $433
D) $865
E) $87

Question

Quizplus · Accepted Answer

The total ordering cost is calculated by multiplying the number of orders per year by the cost per order. If Sarah sells 5,000 boxes per year and pays $50 per order, the total ordering cost is (5,000/number of boxes per order) * $50. Assuming she orders all at once, the cost is $50. However, the question likely assumes multiple orders, so the correct choice is $865, which is the closest reasonable estimate given the options.

Sarah's Computer City Sells 5,000 Boxes of CD -RW Compact