Humboldt Corporation Is Preparing an Aggregate Production Plan for Fasteners

Multiple Choice

Humboldt Corporation is preparing an aggregate production plan for fasteners for the next four quarters. The company's expected quarterly demand is given in the following table. The company will have 1,000 fasteners in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data:
Production cost per unit = $250
Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory)
Hiring cost per worker = $1,000
Firing cost per worker = $2,000
Beginning number of workers = 10
Each worker can produce 100 units per quarter.
Any worker on the staff at the end of the year will not be fired at that time.

-Given the above information, what is the inventory carrying cost of a level plan?

A) $100,000
B) $700,000
C) $70,000
D) $7,000
E) Need more information to answer the question