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

per DVD; DVDs are shipped in packages of

65.

Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is

322,000

DVDs at a rate of

7,000

DVDs per week. DVD Mart earns

13%

on its cash investments. The

purchaseminusorder

lead time is one week. The following cost data are available:

Relevant ordering costs per purchase order $114.5

Carrying costs per package per year:

Relevant insurance, materials handling,

breakage, etc., per year $6.5

What are the annual relevant carrying costs?

A.

$6,072

B.

$8,696

C.

$8,587

D.

$ 802