Answer:
Total inventory cost for a gallon: $ 6.48
Explanation:
discount over list price: 6.50 dollars less 10% = $ 5.85
gallons ordered: 25's 50-gallon drums:
25 x 50 = 1,250
purchase cost: 1,250 gallon x $ 5.85 = 7,312.5
shipment freight: 100
Total: 7,412.5
Gallon purchase cost: 7,412.5/ 1,250 = 5.93 per gallon
$ 5.93 + holding cost of $ 0.55 = $ 6.48