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. Sarah's vendor said that if she purchased 1,000 boxes at a time, she would receive a 10 percent discount. What is her total cost with the discount if the formula for total cost is TC = DP +QIP/2 +DS/Q ?
A) $27,925
B) $30,866
C) $27,866
D) $28,000

Question

Quizplus · Accepted Answer

The total cost with the discount is $27,925. The discount is 10%, so the purchase price is $6 - $0.60 = $5.40. The total cost is then TC = DP +QIP/2 +DS/Q = 5000 * 5.40 + 5000 * 50 / 2 + 5000 * 5.40 * 0.25 / 1000 = $27,925.

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