Question

The deans' suite hoped to cut costs and decided to perform a total cost analysis on its vodka supplier. Consumption was currently 6,000 bottles per semester and this was predicted to maintain that level for the next few years. Their current source, Byron's, charged $9.50 per bottle and packed 288 bottles in a crate. The cost to ship the crate was $15. Another potential source of vodkas was Pancho's, who charged $9.00 per bottle but could ship only 100 bottles in a crate and at a higher price, $20. Assume that a partial crate may be purchased. What is the total annual cost to supply vodka from their current supplier

Answer 1

Answer:

$55,200

Explanation:

Consumption = 6000 bottles

Cost per bottle = $9

Consumption Cost = 6000*$9 = $54,000

No of crates = 6000/100 = 60 crates

Cost pet crate = $20

Crate cost = $1,200

Total annual cost = Consumption Cost + Crate cost

Total annual cost = $54,000 + $1,200

Total annual cost = $55,200

So, the total annual cost to supply vodka from their current supplier is $55,200