Hello, I am having trouble with calculating the "cost of capital" for this report. To my understanding, "Inventory Carrying Cost = Average inventory in units X Unit Price X Carrying cost per year"

By using the figures on the attached table this is what I came up with

5000 = units per month

60000 = units per year

$19.50 = cost per unit

15% = corporate capital rate

5000 units X $19.50 X 15%)/60000 = $.24 per unit

the attached document is an example from another report and I'm was totally confused on the route they took (see sections in red).

Thank you for your help.

Question 1 Calculate the total cost per unit of purchasing from Happy Lucky Assemblies. Solution HLA (China) Quote is given as: Unit Price = $19.50 Shipping Lead Time = 8 Weeks Tooling: $3,000 Inland Transportation (China) = $200 per container Freight Forwarder's fee = $100 per shipment Ocean Transportation1 = $4,000 per container Marine Insurance = $0.50 per $100 shipment U.S. Port handling1 = $1,200 per container Duty 5% of Unit Cost Customs broker fees $300 per shipment Inland Transportation (US) $18.60 per hundred pounds Warehousing costs2 = $1.00 per cu f Currency hedging (broker) = $400 per shipment Admin (Intl shipping) 4hrs x $25 per hour Two 5-day visits to China $20,000 per year Based on the quotation, the total cost per unit of purchasing from HLA can be obtained as given in the table below: Type Unit Price Tooling Packing costs Inland Transportation Freight Forwarder's fees Ocean Transport Marine Insurance US Port Handling Custom duty Customs Broker fees Transportation Basis Calculation Per Unit $19.50 $ 0.02 $3,000 one-time fixed cost $2 per unit $200 per container Spreading cost over 180,000 units produced in 3 years ($3000/180,000) Per unit = ($200 x 3)/5000 $ 2.00 $ 0.12 $100 per shipment Per unit = $100/5000 $ 0.02 $4000 per container $0.50 per $100 shipment $1200 per container 5% of unit cost $300 per shipment $18.60 per hundred Per unit = ($4000 x 3)/5000 Per unit = 0.5% of unit cost Per unit = ($1200 x 3)/5000 Per unit = 0.05 x Unit cost Per unit = $300/5000 Per unit = $18.60/10 $ 2.40 $ 0.10 $ 0.72 $ 0.98 $ 0.06 $ 1.86 (Seattle to Detroit) Warehousing Hedging currency Admin Time pounds $1 per cubic foot $400 per shipment 4 hours x $25/hour per shipment Travel to China $20,000 annually Total Cost per Unit Purchasing Unit Dimension = 24 x 12 x 6-inch = 1728 cu inches = 1 cu f Per unit cost = $1 Cost of capital (interest lost at 15% annually for 4 weeks) = $1 x (0.15/52) x 4 Per unit = ($400 x 3)/5000 Per unit = $100/5000 $ 1.00 Per unit = $20,000/60,000 $ 0.33 $29.37 $ 1.00 $ 0.24 $ 0.02 Sheila must also fgure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15%