The High-Rise Building Company Uses 400,000 Tons of Stone Per

question 11

Multiple Choice

The High-Rise Building Company uses 400,000 tons of stone per year. The carrying costs are $100/ton. The cost per order is $500. Calculate the total costs of optimal inventory.

• A)$200,000
• B)$150,000
• C)$100,000
• D)$50,000

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Definitions:

Deferred Tax

An accounting concept referring to a temporary difference between the tax expense shown in the income statement and the tax payable to the tax authorities, due to timing or methodological differences in recognizing revenue and expenses.

Income Tax Expense

The amount of money that a company or individual owes to the government based on their taxable income.

Deferred Tax Liability

A financial obligation recorded on a company's balance sheet that results from a difference in the timing of when income is earned and when it is taxable.