LAMA Creations creates sweaters using the wool of the Llama. The wool used in the manufacturing process is ordered by the bundle. LAMA requires 1,200 bundles of Llama wool per year and places orders of 100 bundles at a time. The cost of ordering is $80.00 per order and the carrying cost per bundle is $3.50. What are LAMA Creations' ordering costs?
A) $350.00
B) $480.00
C) $960.00
D) $1,060.00

Question

Quizplus · Accepted Answer

LAMA Creations places 12 orders per year (1,200 bundles / 100 bundles per order). The ordering cost per order is $80.00, so the total ordering cost is 12 orders * $80.00 = $960.00.

LAMA Creations Creates Sweaters Using the Wool of the Llama