Aberwald Corporation Aberwald Corporation Expects to Order 126,000 Memory Chips for Inventory

question 34

Multiple Choice

Aberwald Corporation
Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firm's inventory carrying cost is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Refer to Aberwald Corporation.At the EOQ,what is Aberwald's cost of ordering and carrying inventory?

• A) $23,820
• B) $7,940
• C) $15,940
• D) $34,220
• E) $47,693

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Definitions:

Post Hoc

The fallacy of using the fact that one event preceded another as sufficient evidence for the conclusion that the first caused the second.

Fallacy

An incorrect reasoning technique that spoils the legitimacy of an argument.

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A soft, cohesive substance designed to be chewed without being swallowed, often used to freshen breath or for enjoyment.

Arm Sore

A physical condition often resulting from excessive use or exertion of the arm muscles, leading to discomfort or pain.