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Probett’s Garage uses 120 boxes of cleaning cloths a year. The boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on an annual basis. Determine the total costs of the cleaning cloths.

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busi4real92

Answer: $730.2

Explanation:

Let the total cost of cleaning clothes = X

Other variables include:

Total cost of boxes = $6×120

=$720

Ordering cost =$3

Holding costs = (10/100 ×6)12

=$7.2

Total costs of cleaning clothes =

The cost of boxes+ordering cost+holding cost

=720+3+7.2 = $730.2

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