West sells specialized products produced by electronics companies to 100 engineering firms. West sells these products at a price based on West’s purchase price. West’s customer cost hierarchy is as follows:

Next year West plans to sell $4,000,000 of product to the 100 engineering firms they serve. They anticipate that each firm will place an average of 4 orders. West’s predicted customer costs for next year are:

a. $80,000

b. $300,000

c. $3,200,000

d. $3,500,000

Transcribed Image Text:

Unit.. Batch Customer Facility Cost 80 percent of selling price $200 per sales order $1,000 per customer per year $120,000 per year