Refer to Phelps Corporation.What are Phelps Corp.'s total annual ordering costs for Material A?
A)$6,000
B)$600
C)$125
D)$1,000

Question

Quizplus · Accepted Answer

The total annual ordering cost for Material A can be calculated as follows: 
Number of orders = Total demand / Quantity per order 
= 10,000 / 200 
= 50 orders 
Total ordering cost = Number of orders * Cost per order 
= 50 * $2.50 
= $125 
Therefore, the best choice is option C, which is the total annual ordering cost for Material A is $125.