Comfy Wheels Bus Company Produces Buses

question 62

Multiple Choice

Comfy Wheels Bus Company produces buses. In order to produce the seats for the buses, special equipment must be set up. The setup cost per frame is $35. The cost of carrying seats in inventory is $6 per seat per year. The company produces 90,000 buses per year.
Total carrying costs (rounded to the nearest dollar) associated with the economic order quantity are

• A)$3,075.
• B)$3,750.
• C)$502.
• D)$328.

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Definitions:

Retail Life Cycle

The progression of stages that a retail business or product goes through, from introduction and growth to maturity and, eventually, decline.

Accelerated Development

A strategy employed to speed up the process of product development and market introduction in order to leverage competitive advantages.

Retail Life Cycle

The progression of stages through which a retail business or product category goes, from introduction and growth to maturity and decline.

Obsolescence

The process by which a product, service, or technology becomes outdated or no longer useful due to advancements or changes in consumer preferences.