Use This Information to Answer the Following Questions

question 6

Multiple Choice

Use this information to answer the following questions.
A cake factory can produce cakes at the rate of 500 per day.The factory supplies its cakes to local grocery stores at a rate of 250 per day.The cost to prepare the equipment for producing the cakes is $20.Annual holding costs are $2 per cake.Assume that the factory operates 250 days a year.
-Refer to the information above.What is the optimal EPQ?

• A)1389
• B)1425.68
• C)1250.27
• D)1000
• E)1581.14

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Definitions:

Sales

Transactions involving the exchange of goods or services for money, contributing to a company's revenue.

Break-Even Point

The Break-Even Point is the level of production or sales at which total revenues equal total costs, resulting in no profit or loss for the business.

Sales Dollars

Sales dollars refer to the total revenue generated from goods or services sold by a company, expressed in monetary terms.

Pretax Income

The income of a company before tax is deducted.