Which of the Following Costs Are Considered in the EOQ

question 24

Multiple Choice

Which of the following costs are considered in the EOQ model?

• A)ordering costs
• B)selling costs
• C)carrying costs
• D)both a and c

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Definitions:

Fixed Costs

Costs that do not vary with production volume, such as rent, salaries, and insurance premiums.

Sales Mix

Refers to the combination of different products or services that a company offers, influencing overall sales and profitability.

Unit Contribution Margin

The difference between the selling price per unit and the variable costs per unit, representing how much each unit sold contributes to covering fixed costs and generating profit.

Break-even Sales

Break-even Sales represent the amount of revenue needed to cover all fixed and variable costs, at which point a business does not make a profit or incur a loss.