Show all work. Thank you. C (Setup Costs) (Production Costs) - $5000$1,200,000 -
ID: 425040 • Letter: S
Question
Show all work. Thank you.
C (Setup Costs) (Production Costs) - $5000$1,200,000 - $1,277,000 (Storage Costs) $72,000 1. You have an idea. To cut down on storage costs you will print the book in two print runs of 600,000 each, as shown in the figure below 600,000 500,000 400,000 2 300,000 200,000 100,000 0 0 Ayerage number in stock 2 345 67 8 9 10 11 12 Month A) What are the setup costs for two print runs? B) What are the production costs? C) What are the storage costs? D) What is the total cost for the year?Explanation / Answer
A) Setup costs for two print runs = 5000*2 = $ 10,000
B) Production costs = $ 1,200,000
C) With two print runs, the average stock and hence the storage cost will halve. Storage costs = 72000/2 = $ 36,000
D) Total cost for the year = 10000 + 1200000 + 36000 = $ 1,246,000