Kraus Department Store,located in Chicago,sells 1,700 coffeemakers per year.The purchase price of each coffeemaker is $70.The ordering cost is $90 per order.The holding cost is 30% of the unit purchase price.In this example,the holding costs are ______.
A)approximately $2,167
B)approximately $2,535
C)approximately $4,628
D)none of these

Question

Quizplus · Accepted Answer

The holding cost is calculated as 30% of the unit purchase price, which is 30% of $70 = $21 per unit per year. For 1,700 coffeemakers, the total holding cost would be 1,700 * $21 = $35,700 per year, which is not an option provided.

Kraus Department Store,located in Chicago,sells 1,700 Coffeemakers Per Year