Franconia Notch Blowers Would Like to Find the Optimum Size

question 85

Multiple Choice

Franconia Notch Blowers would like to find the optimum size order given that it annually sells 10,000 snow blowers per year.It costs Franconia $75 each time it processes an order for snow blowers and the carrying cost for each blower is $50 per year.What is the optimum order size for Franconia?

• A) 30,000
• B) 15,000
• C) 173.21
• D) 122.47

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Definitions:

Cost

The amount of money required to purchase something or the expense incurred to produce something.

Selling Price

The amount for which a good or service is sold to the customer.

Outstanding Balance

Represents the total amount of money owed on a loan, credit card, or any debt, remaining to be paid.

Operating Expenses

The costs associated with the day-to-day functions of a business, excluding direct production costs.