Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which...
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Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases DVDs from Globe at $ 25 per? DVD; DVDs are shipped in packages of 60. Globe pays all incoming? freight, and DVD Mart does not inspect the DVDs due to? Globe's reputation for high quality. Annual demand is 320,000 DVDs at a rate of 6,600 DVDs per week. DVD Mart earns 11?% on its cash investments. The purchaseminusorder lead time is one week. The following cost data are? available: Relevant ordering costs per purchase order $ 119.50 Carrying costs per package per? year: Relevant? insurance, materials? handling, breakage,? etc., per year $ 7.50
What are the annual relevant carrying? costs?
A) $7,414
B) $5,423
C) $678
D) $7,581
The correct answer is "A". Please explain step-by-step how to solve this
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