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Globe Inc. is a distributor of DVDs . DVD Mart is a local retail outlet which sells blank and recorded DVDs . DVD Mart purchases

Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases DVDs from Globe at $30.00 per DVD; DVDs are shipped in packages of 61. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is320,000 DVDs at a rate of7,000 DVDs per week. DVD Mart earns13% on its cash investments. The purchaseminusorder lead time is one week. The following cost data are available:
Relevant ordering costs per purchase order
$119.50
Carrying costs per package per year:
Relevant insurance, materials handling,
$7.50
breakage, etc., per year
What are the relevant total costs?
A.
$17,541
B.
$96,676
C.
$21,311
D.
$14,837

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