C& a sells t-shirts for $20 that cost $5 to produce. the annual holding cost percentage is 10% and the t-shirts turn 25 times a year. what holding cost does c& a incur for each t-shirt?

a. $0.04
b. $0.02
c. $0.08
d. $0.50

B. $0.02

Explanation:

The computation is shown below:

Since the annual holding cost percentage is 10% and the cost of production is $5. So, the holding cost would be

= $5 × 10%

= 0.5

Now if the t-shirts run 25 times a year, so the holding cost would be

= 0.5 ÷ 25 times

= $0.02

Simply we compute the holding cost based on number of times the t-shirt turns in a year

All other information which is given is not relevant. Hence, ignored it

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