Develop a level material use schedule. Calculate the setup cost.
A firm wants to develop a level material use schedule based on the following data. What should be the setup cost?
a) $0.45
b) $4.50
c) $45
d) $450
e) $500
The provided data is:
Desired lot size: 60
Annual demand: 40,000
Holding cost: $20 per unit per year
Daily production rate: 320
Work days per year: 250