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What is the cost of carrying inventory

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Question - Paint Corporation expects to use 48,000 gallons of paint per year costing P12 per gallon. Inventory carrying cost is equal to 20% of the purchase price. The company uses its inventory at a constant rate. The lead time for placing the order is 3 days, and Paint Corporation holds 2,400 gallons of paint as safety stock. If the company orders 2,000 gallons of paint per order, what is the cost of carrying inventory?

a. P5,760.

b. P5,280.

c. P8,160.

d. P2,400.

Reference no: EM132747736

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