Figure 24-4 Buckner Manufacturing Purchases Components Produced by Cochran Company in the in the Manufacture

Multiple Choice

Figure 24-4
Buckner Manufacturing purchases components produced by Cochran Company in the manufacture of their main product. For the next year, Buckner expects to use a total of 30,000 parts. Buckner typically orders 500 units at a time. The cost of placing an order is £40, and the average annual cost of carrying one unit of inventory is £2.
-Refer to Figure 24-4. Buckner's total ordering cost is

A) £120.
B) £2,000.
C) £2,400.
D) £500.