Answer the Following Questions Using the Information Below

question 121

Multiple Choice

Answer the following questions using the information below:
Digital Goods is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases tapes from Digital Goods at $10.00 per DVD; DVDs are shipped in packages of 25. Digital Goods pays all incoming freight, and DVD Mart does not inspect the DVDs due to Digital Goods' reputation for high quality. Annual demand is 208,000 DVDs at a rate of 4,000 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 relevant total costs?

• A)$5,697
• B)$2,829
• C)$8,029
• D)$2,868

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Definitions:

Reciprocity

Reciprocity is a social norm that involves mutual exchange of goods, services, favors, or benefits between parties.

Social Responsibility

The ethical framework suggesting that individuals and organizations have an obligation to act for the benefit of society at large.

Mirror-Image Perceptions

Mirror-image perceptions refer to the mutual views often held by conflicting people or groups, each seeing itself as ethical and peaceful and the other as evil and aggressive.

Hostile

Showing or feeling opposition or dislike; unfriendly or antagonistic.