A Firm Wants to Develop a Level Material Use Schedule

Multiple Choice

A firm wants to develop a level material use schedule based on the following data. What should be the setup cost? $$\begin{array} { | l | l | } \hline \text { Desired lot size: } & 60 \\\hline \text { Annual demand: } & 40,000 \\\hline \text { Holding cost: } & \$ 20 \text { per unit per year } \\\hline \text { Daily production rate: } & 320 \\\hline \text { Work days per year: } & 250 \\\hline\end{array}$$

A) $0.45
B) $4.50
C) $45
D) $450
E) $500