Torn Paper Inc purchases 23,500 reams of paper per year, ordered in lots of 450...
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Torn Paper Inc purchases 23,500 reams of paper per year, ordered in lots of 450 reams per week at $100 per ream. The vendor covers all shipping costs. Torn Paper is not required to inspect the shipment upon entry. Tom Paper eams 8% on its cash investments. The purchase order lead time is two weeks. The following cost data are available: Relevant ordering costs per purchase order Relevant insurance, materials handling, breakage, and so on, per year $23.50 $12.00 What are the total relevant costs assuming the quantity ordered equals 200 reams? ..... OA. $5.975 50 OB. $4.920.50 OC. $4.075 25 OD. $4 165 00 OE $5 111 25
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