What is the holding cost of this beer pallet?

A supermarket calculates that the average holding cost for an item is $1.50 per cubic meter per day. A beer pallet which has volume of 0.5 cubic meter will be stored for 5 days.

What is the holding cost of this beer pallet?
A . $4.00
B . $4.50
C . $4.25
D . $3.75

View Answer

Answer: D

Explanation:

The holding cost per day of the beer pallet is equal to 1.50/2=0.75

The beer pallet is stored for 5 days, the total holding cost is: 0.75*5=3.75.

LO 2, AC 2.2