Figure 24-2 Hapsburg Manufacturing Purchases Components Produced by Little Company in the in the Manufacture

question 36

Multiple Choice

Figure 24-2
Hapsburg Manufacturing purchases components produced by Little Company in the manufacture of its main product. For the next year, Hapsburg expects to use a total of 20,000 parts. Hapsburg typically orders 2,000 units at a time. The cost of placing an order is £100, and the average annual cost of carrying one unit of inventory is £5.
-Refer to Figure 24-2. Hapsburg's total inventory cost is

• A)£5,100.
• B)£6,000.
• C)£10,000.
• D)£20,000.

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Definitions:

Social Security

A government program that provides financial assistance to people with inadequate or no income, especially the elderly, disabled, and unemployed.

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, as well as for some younger people with disabilities.

Employer's Payroll Taxes Expenses

These are taxes paid by the employer based on the wage and salary amounts paid to employees, including social security, Medicare taxes, and unemployment taxes.

FICA Tax

Taxes required by the Federal Insurance Contributions Act, funding Social Security and Medicare benefits.