A manufacturing company producing electronic components reported 75 million in sales over the last year. At the end of the same year, the company reported it had 15 million dollars worth of inventory in terms of COGS on average during that same year. The annual per-unit inventory holding cost (the cost of carrying a unit of inventory including labor costs, insurance, opportunity cost of capital, etc. for a year) adds up to 25% of that unit's COGS value. What are the annual inventory holding costs incurred by the manufacturer?
A manufacturing company producing electronic components reported 75 million in sales over the last year. At the end of the same year, the company reported it had 15 million dollars worth of inventory in terms of COGS on average during that same year. The annual per-unit inventory holding cost (the cost of carrying a unit of inventory including labor costs, insurance, opportunity cost of capital, etc. for a year) adds up to 25% of that unit's COGS value. What are the annual inventory holding costs incurred by the manufacturer?
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 14P
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