Use the Information Below to Answer the Following Question(s)

question 54

Multiple Choice

Use the information below to answer the following question(s) .Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream.The vendor covers all shipping costs.Office Supply House is not required to inspect the shipment upon entry.Office Supply House earns 20% on its cash investments.The purchase order lead time is two weeks.The following cost data are available:

-What are the total relevant costs assuming the quantity ordered equals 80 reams?

• A)$3,913.65
• B)$3,948.50
• C)$4,075.25
• D)$4,165.00
• E)$5,326.49

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Definitions:

Price of Capital

The cost of using capital assets, including the interest or finance charges paid on borrowed funds or the opportunity cost of using owned capital.

Price of Labor

The wage rate or the cost of hiring workers in the labor market.

Minimize Costs

The process of finding ways to reduce expenses and lower the cost of production in order to increase profitability.

Last Dollar

The concept of last dollar refers to the final portion of funding or resources available for a project, initiative, or individual, often indicating the utilization of all available funds.