Cycles De Oro Produces 120,000 High-Tek Bikes a Year and Orders

question 51

Multiple Choice

Cycles de Oro produces 120,000 high-tek bikes a year and orders the brake assembly from IKON for $15.40 each. The order cost is $84, and Cycles estimates its inventory carrying costs are 15%. What is its total ordering cost per year?

• A) $7,968
• B) $3,412
• C) $4,118
• D) $6,437

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Definitions:

Habit

A repetitive behavior that an individual performs regularly, often without much conscious thought.

Pleasure Principle

In psychoanalytic theory, it is the driving force of the id that seeks immediate gratification of all desires, wants, and needs.

Guilt/Pride Principle

Refers to the internal motivators of guilt and pride that can encourage conformity to social norms and personal standards.

Ego Ideal

The part of the personality that consists of the standards of perfection and aspirations a person aims to achieve.