Which of the Following Is NOT an Assumption of the Classic

question 5

Multiple Choice

Which of the following is NOT an assumption of the classic Economic Order Quantity (EOQ) ?

• A) Lead time is known and constant.
• B) Demand is known and constant.
• C) Instantaneous replenishment.
• D) There is no quantity discount.
• E) The production rate must be greater than the consumption rate.

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Definitions:

First Stage Allocations

The initial process of distributing overhead costs to various cost pools or departments in activity-based costing.

Activity Rate

The cost driver rate in activity-based costing used to assign costs to cost objects, based on each cost object's usage or creation of costs.

Processing Activity

Refers to operations or work performed in a systematic sequence to alter materials or information.

Activity-Based Costing

An accounting method that identifies and assigns costs to specific activities, making it easier to accurately measure the cost and performance of particular activities.