In the Quantity Discount Model, with Carrying Cost Stated as a Percentage

question 89

Multiple Choice

In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, in order for the EOQ of the lowest curve to be optimum, it must

• A)have the lowest total cost.
• B)be in a feasible range.
• C)be to the left of the price break quantity for that price.
• D)have the largest quantity compared to other EOQs.
• E)have smaller ordering costs than the others.

---

Definitions:

Accrued Salaries

This refers to wages that have been earned by employees but have not yet been paid by the company.

Revenue Journal

A specialized accounting journal used to record the sales of goods and services and revenue generated.

Accounts Receivable

This term represents money owed to a business by its clients for goods or services delivered but not yet paid for.

Controlling Account

A general ledger account that summarizes the total amounts listed in a subsidiary ledger.