Which of the Following Statements About Quantity Discounts Is False

question 170

Multiple Choice

Which of the following statements about quantity discounts is false?

• A) The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs.
• B) In inventory management, item cost becomes relevant to inventory decisions only when a quantity discount is available.
• C) If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule.
• D) The larger annual demand, the less attractive a discount schedule will be.
• E) The smaller the ordering cost, the less attractive a discount schedule will be.

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Definitions:

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services sold on credit before any deductions for returns or allowances.

Aging of Accounts Receivable

The process of categorizing accounts receivable according to the length of time an invoice has been outstanding.

Age Group

A classification of people based on their age, often used in demographics and marketing.

Number of Days

Often refers to the time period used in finance and accounting to calculate interest, production times, or deadlines.