Question

The owner has recently opened another store of the same size in New York City; however the demand for coffee is increased to 3,900 pounds annually and the holding cost is $60 per pound. Those numbers are much higher as is the cost of real estate in NYC. The owner places orders of the same size as the first store because they are the same size stores.

How much will the total cost be in the new coffee shop?

Answer 1

The total cost in the new coffee shop would be $234,000.

Step-by-step explanation:

To calculate the total cost at the new coffee shop, we need to consider the increased demand and the holding cost. The demand for coffee is now 3,900 pounds annually. If the owner continues to place orders of the same size, which is not ideal, they would need to order 3,900 pounds. The holding cost is $60 per pound, so the total cost would be 3,900 pounds multiplied by $60, which equals $234,000.