Question

LN Electric uses 6,000 toggle switches a year. Switches are priced as in the table below. It costs $40 to prepare an order and receive it, and annual carrying cost is $0.8 per unit.

a. How many toggle switches does LN Electric use annually?

6,000
b. What is the cost to prepare an order and receive it?
$40.00
c. What are the annual carrying costs per switch?
$0.80

Answer 1

This question pertains to calculating operational costs for a business (LN Electric) regarding their toggle switch inventory and associated annual costs.

Step-by-step explanation:

The question revolves around an operational cost calculation for LN Electric, which uses 6,000 toggle switches annually. The company incurs a cost of $40 to prepare and receive an order, and the annual carrying cost per switch is $0.80. This scenario is typically analyzed within a business or operations management context, focusing on inventory and cost management which are essential for efficient business operations.