A Board Game Sells for $29

question 50

Multiple Choice

A board game sells for $29.99. Leo's Games consistently sells 3,500 units of this game year after year. The fixed cost to place an order is $52 and the carrying cost per game is $.80. What is the
Economic order quantity?

• A) 477 units
• B) 603 units
• C) 675 units
• D) 807 units
• E) 864 units

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Definitions:

Direct Method

A method for preparing a cash flow statement where cash receipts and payments are reported directly, without using adjustments for non-cash items.

Selling Expense

Costs incurred to sell a product, including advertising, sales commissions, and other expenses directly related to the sales process.

Administrative Expense

Costs associated with the general administration of a business, such as salaries of executive officers, legal fees, and office supplies.

Investing Activities

Activities related to buying and selling long-term assets and various investments, which appear in a firm's statement of cash flows.