COST ACCOUNTING CALCULATION FOR TOTAL ANNUAL COST

7. A manufacturing company uses 28,000 components at an even rate during the year. Each order placed with the supplier of the components is for 1.600 components, which is the Economic Order Quantity. The company holds a buffer inventory of 800 components. The annual cost of holding one component in inventory is 3.50. Calculate: a) The Annual Cost of holding inventory of the component b) The Annual Cost of ordering inventory of the component c) The Total Annual Cost associated with inventory of the component