Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases DVDs from Globe at $25.00 per DVD; DVDs are shipped in packages of 63. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is 314,000 DVDs at a rate of 6600 DVDs per week. DVD Mart earns 15% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
What are the annual relevant ordering costs?
Definitions:
Gain Or Loss
A financial result that indicates the difference between the sale price of an asset and its original purchase price.
Functional Currency
The primary currency of the main economic environment in which an entity operates.
Asset And Liability Account Balances
The respective values of a company's current and non-current assets, and its current and long-term liabilities at a point in time.
Local Currency
Refers to the legal tender or official currency that is used within a country's borders.
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