Please help me with the solution. Each year the Alma Vacuum Company (AVC) manufactures 35,000 of its SuperDuper Dirt Grabber carpet cleaners, each of which requires a starter switch.The plant operates five days per week for 50 weeks per year and pays a 7%interest rate at the local bank to fund inventory. Demand for vacuums is linear(constant) and is unaffected by the changing seasons. Switches are purchasedfrom the Salem Switch Company who has offered the following price offersbased upon volume:Order QuantityPrice Each1-4,999$.895,000 – 9,999$.65>10,000$.58If AVC has a known order cost of $55, what is its optimal order quantity?(HOLDING COST calculations should be made to four decimal places. All othercalculations should be rounded to the nearest whole number)Select one:O A. 9,199O B. 23,168O C. 20,969D. 10,000O E. 12,255

Option D is the Correct Answer i.e 10,000

Each year the Alma Vacuum Company (AVC) manufactures 35,000 of its Supe Duper Dirt Grabber carpet cleaners, each of which requires a starter switch. The plant operates five days per week for 50 weeks per year and pays a 7% interest rate at the local bank to fund inventory. Demand for vacuums is linear (constant) and is unaffected by the changing seasons. Switches are purchase from the Salem Switch Company who has offered the following price offers based upon volume: Order Quantity Price Each 1-4,999 $.89 5,000 - 9,999 $.65 210,000 $.58 f AVC has a known order cost of $55, what is its optimal order quantity? (HOLDING COST calculations should be made to four decimal places. All othe

Each year the Alma Vacuum Company (AVC) manufactures 35,000 of its Supe Duper Dirt Grabber carpet cleaners, each of which requires a starter switch. The plant operates five days per week for 50 weeks per year and pays a 7% interest rate at the local bank to fund inventory. Demand for vacuums is linear (constant) and is unaffected by the changing seasons. Switches are purchase from the Salem Switch Company who has offered the following price offers based upon volume: Order Quantity Price Each 1-4,999 $.89 5,000 - 9,999 $.65 210,000 $.58 f AVC has a known order cost of $55, what is its optimal order quantity? (HOLDING COST calculations should be made to four decimal places. All othe

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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