Problem:
MacPack Products orders materials from its suppliers 26 times per year, at a re-ordering cost of $350 (per order). The company's average inventory is valued at $400,000.
Required:
Question 1) What is Macpack's annual inventory carrying cost, assuming an ICC rate of 25%?
A) $109,000
B) Cannot be determined
C) $9,100
D) $100,000
Solve the problem and show all work.