Answer:
$1,501,600
Explanation:
We have Q = 400
Average inventory = Q/ 2
= 400/2
= 200
Holding cost/year = $4
Annual holding cost = $800
Annual set up cost = 10,000/400
= 25
25 x 32 = 800
Demand x cost per unit
= 10000 x $150
= 1,500,000
Total cost TC = 1500000 + 800 + 800
= $1,501,600