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?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
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Please give me answer general accounting question

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?
Transcribed Image Text: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?
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