The Allianz Company produces a specialty wood furniture​ product, and has the following information available concerning its inventory​ items:   Relevant ordering costs per purchase order ​$510 Relevant carrying costs per year for each​ product:        Required annual return on investment ​15%      Required other costs per year ​$7   Annual demand is​ 30,000 products per year. The purchase price per product is​ $50. What is the annual relevant carrying​ costs?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 3E
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The Allianz Company produces a specialty wood furniture​ product, and has the following information available concerning its inventory​ items:
 
Relevant ordering costs per purchase order
​$510
Relevant carrying costs per year for each​ product:
 
     Required annual return on investment
​15%
     Required other costs per year
​$7
 
Annual demand is​ 30,000 products per year. The purchase price per product is​ $50. What is the annual relevant carrying​ costs?
 
 
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