Power Pumps produces a variety of commercial sump pumps. One of their models--Mighty Mo--is produced in a small plant in Missouri. Next year Power Pumps anticipates on selling 2,000 units of the Mighty Mo. Each requires six rotors, which Power Pumps purchases from an overseas supplier. The cost of placing an order to this supplier is $250, while the unit cost of the rotor is $60. However, if Power Pumps orders 2,000 rotors at a time, the cost will be lowered to $55. If the holding cost for Power Pumps is 10% of purchasing price, what would be the total ordering cost for these discounted rotors? A) $6,000 B) $6,200 C) $7,000 D) $8,800

Q&A Education