How many cases of microwave popcorn are sold annually by a firm which has total annual order costs of $32,000, orders in units of 100 cases, and is charged $90 per order in addition to the $72 per case product cost?

Question

Quizplus · Accepted Answer

First, we need to calculate the ordering cost per case:
Order cost per case = Ordering cost / Number of cases per order
Order cost per case = $90 / 100 = $0.90
Next, we need to calculate the total cost per case:
Total cost per case = Product cost + Order cost per case
Total cost per case = $72 + $0.90 = $72.90
Now, we can calculate the number of cases sold annually:
Number of cases sold annually = Total ordering cost / Order cost per case
Number of cases sold annually = $32,000 / $0.90 = 35,556. 
Therefore, the answer is B) 35,556 cases.

How Many Cases of Microwave Popcorn Are Sold Annually by a Firm