Answer the Following Questions Using the Information Below:
the Following

question 38

Multiple Choice

Answer the following questions using the information below:
The following information applies to Krynton Corp. which supplies microscopes to laboratories throughout the country. Krynton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation.
$\begin{array}{lr}\text { Annual demand (weekly demand }=1 / 52 \text { of annual demand) } & 13,000 \text { units } \\\text { Orders per year as per EOQ model } & 13 \\\text { Lead time in days } & 15 \text { days } \\\text { Annual relevant carrying costs } & \$ 2,600\end{array}$
-What are the annual relevant ordering costs,assuming that relevant total costs are minimal?

• A) $1,000
• B) $2,253.33
• C) $2,600
• D) $6,000

---

Definitions:

Unit Variable Costs

The variable costs that are incurred for each unit of production, including materials and labor directly associated with the manufacturing of the product.

Operating Income

The income a business receives after subtracting operating costs from its gross profit.

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of production or business activity.