Big Bus Company Produces Buses

question 57

Multiple Choice

Big Bus Company produces buses.In order to produce the seats for the buses,special equipment must be set up.The setup cost per frame is $40.The cost of carrying seats in inventory is $5 per seat per year.The company produces 100,000 buses per year. What is the number of seats that should be produced per setup in order to minimize the total setup and carrying costs?

• A)566 seats
• B)894 seats
• C)1,265 seats
• D)2,828 seats