When Graphing the EOQ, Which of the Following Statements Is

question 2

Multiple Choice

When graphing the EOQ, which of the following statements is false?

• A) Holding costs are a downward sloping line to the right.
• B) The EOQ is represented by the minimum total cost.
• C) Ordering costs are a downward sloping line to the right.
• D) Average inventory on hand results in higher holding costs.
• E) As order size increases, so does average inventory on hand.

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Definitions:

Gross Sales

The total sales revenue of a company, before any deductions for returns, allowances, or discounts.

Apportion

To apportion means to divide and distribute according to a plan or formula, often used in the context of allocating expenses among different departments or time periods.

Indirect Expenses

Expenses that are not directly attributable to a specific cost object, such as goods or services, and typically include administrative and marketing expenses.

Arbitrary Methods

Accounting practices based on judgment or preference rather than strict rules or calculations.