Lagoon Enterprises Uses an Economic Order Quantity Model and Has

Multiple Choice

Lagoon Enterprises uses an economic order quantity model and has determined an optimal order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per order, and holding costs are $4 per unit. The company's annual ordering and holding costs total:

A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) None of the answers is correct.