The Talbot Company uses electrical assemblies to produce an array of small appliances. One of...
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Accounting
The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $10 per year. The company operates 250 days per year.
What is the Total Annual Cost (that is, Annual Holding Cost plus Annual Ordering Cost) if Talbot orders using the Economic Order Quantity (EOQ)? (choose the range below which contains the correct answer)
Group of answer choices:
greater than $6,000
greater than $5,000 but less than or equal to $6,000
greater than $4,000 but less than or equal to $5,000
greater than $3,000 but less than or equal to $4,000
less than or equal to $3,000
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