Which of the Following Is True When Calculating Economic Order

question 37

Multiple Choice

Which of the following is true when calculating Economic Order Quantity?

• A)Ordering cost is less than carrying cost.
• B)Ordering cost is greater than carrying cost.
• C)Ordering cost is equal to carrying cost.
• D)Total cost is equal to price times quantity.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Cash Budget

Budget that shows cash inflows and outflows during a period of time.

Shareholders' Equity

The portion of a company's assets that belongs to shareholders after liabilities have been subtracted; also known as net assets or equity.

Credit Statement

A detailed report of an individual's or company's credit history and current credit standing, used by lenders to evaluate creditworthiness.