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