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.

40.What is the economic order quantity (EOQ)?

a.1,554 units

b.1,654 units

c.1,754 units

d.1,854 units