Spencer Industries produces a single product, and has the following information available concerning this item:

Relevant ordering costs per purchase order$400

Relevant carrying costs/unit per year:

Required annual return on investment20%

(Hurdle Rate)

Required other costs per year (insurance, etc.) $10.00

Annual demand is 100,000 units per year. The purchase price per package is $80.

HINT:When you are calculating total carrying cost/unit, don't forget to add opportunity cost to the $10.00/unit.

41.What are the relevant total costs (ordering cost + carrying cost) if Spencer Industries insists on using an order size equal to 2,000 units?

a.$44,000

b.$46,000

c.$48,000

d.$50,000