Question 7

Tech Company is a medium-sized consumer electronics retailer. The company reported $155,000,000 in revenues for 2007 and $110,050,000 in Costs of Goods Sold (COGS). In the same year, Tech Co. held an average of $20,000,000 in inventory.

Inventory cost at Tech Co. is 35 percent per year. What is the per unit inventory cost (in dollars) for an MP3 player sold at $50? Assume that the margin corresponds to the retailers average margin.