A firm wants to develop a level material use schedule based on the following data. What should be the setup cost?
Desired lot size:
60
Annual demand:
40,000
Holding cost:
$20 per unit per year
Daily production rate:
320
Work days per year:
250
A) $0.45
B) $4.50
C) $45
D) $450
E) $500
Answer: A