You are applying for a job at a major door and window retailer. The manager would like to evaluate your skills in the area of inventory management and he provides you with the following information:

• Annual demand is 450 windows (an average of 9 every week).
• Average cost of each window is P250.
• Purchase order lead time is 21 days.
• Relevant handling costs are P5,000 per year.
• Relevant ordering costs are P150 per order.
• Shareholders' expected return is 8%.
• Shipments are FOB destination.

What are the total relevant costs, assuming the order size is 75 units and the relevant carrying costs are P50?

P1,500

P1,775

P2,775

P2,673