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Purple Frog Distributing wants to understand the cost of carrying its most popular item: the Super Frog plush toy. The toy is currently manufactured in
Purple Frog Distributing wants to understand the cost of carrying its most popular item: the Super Frog plush toy. The toy is currently manufactured in Singapore and shipped in full container loads via ocean carrier. One container holding 4,000 units is shipped each month, except for a larger 3 container shipment of 12,000 units in August just prior to the peak-selling football season. The toys arrive at the company's 200,000 ft warehouse in Weatherford, TX the first week of each month. Purple Frog estimates its cost to store product at 3.6% of inventory cost. Sales of the toy have been steady the past 5 years and are not expected to change in the near future. Each toy costs the company $10, and is sold to the public at a price of $28.50. Additional information is provided below (10 points). $2,500 1.5% 0.4% A/ 1.1% 13,500 units 4,000 units 500 units Cost to ship one container Purple Frog corporate hurdle rate Taxes Insurance Estimate of inventory risk Peak inventory (mid-August) Average inventory Low inventory (week before Texas game) Answer this problem by correctly calculating the annual inventory carrying cost to the rlearest whole dollar. Saved O
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