The Flowering Vine buys hanging plants for $2 each and resells them for $8.95 each.The firm sells 3,500 plants per year.Generally,the firm orders 400 plants at a time and has a fixed cost per order of $28.The carrying cost per unit is $1.16.To avoid newer plants mixing with older plants,the inventory is totally sold out before it is restocked.The total annual carrying cost is ____ and the total annual restocking cost is ____.
A)$211; $245
B)$211; $269
C)$232; $245
D)$232; $256
E)$232; $269

Question

Quizplus · Accepted Answer

Total annual carrying cost = [(400 + 0)/2] × $1.16 = $232; Total restocking cost = (3,500/400) × $28 = $245

The Flowering Vine Buys Hanging Plants for $2 Each and Resells