What are the consequent variable cost

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Reference no: EM132121732

A baker works 6 days a week for 49 weeks a year. Flour is delivered directly to the bakery with a charge of $7.5 for each delivery. The baker uses an average of 10 sacks of flour a day, for which he pays $12 a sack. The cost of holding flour is $2.25 per sack per year.

(a) What size of delivery should be baker use and what are the consequent variable cost?

(b) How much should be ordered if the flour has a shelf life of two weeks?

Reference no: EM132121732

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