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Torque Manufacturing forecasts that its production will require 600,000 tons of bauxite over its planning period....

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Finance

Torque Manufacturing forecasts that its production will require600,000 tons of bauxite over its planning period. Demand forTorque's products is stable over time. Ordering costs amount to anaverage of $15.00 per order. Holding costs are estimated at $1.25per ton of bauxite. If Torque uses an inventory quantity of 3,000tons, what will be the total annual cost of inventory?

The answer is $4,875 but I don't know how they got it. Cananyone help?

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