Big Bus Company Produces Buses

Multiple Choice

Big Bus Company produces buses. In order to produce the seats for the buses, special equipment must be set up. The setup cost per frame is $40. The cost of carrying seats in inventory is $5 per seat per year. The company produces 100,000 buses per year.
-Refer to the figure.What are the total carrying costs (rounded to the nearest dollar) associated with the economic order quantity?

A) $316
B) $506
C) $3,163
D) $3,613