[ejohnson4256]

I'm not sure whether to include the selling price to the customer...

Brady Company sells imported goods made in India. One product it sells is a wooden music box. The music boxes cost Brady $65, and Brady charges its customers a price of $250.Brady's cost of capital is 12%. On average, an entire year elapses between the time Brady pays for a music box and the time Brady collects the cash from the sale of the music box. What are Brady's annual financial holding costs per unit for the wooden music boxes?

Cost of capital = 65*.12 = 7.8
Including selling cost:7.8*12months = $93.60.
holding cost = 250 - 93.60 = $156.40 per unit

Excluding selling cost: holding cost = 7.8*12months = $93.60