Garner Industries Increased the Size of Inventory Order Quantities Above

question 71

Multiple Choice

Garner Industries increased the size of inventory order quantities above the quantity determined by EOQ. What is the impact on total annual carrying costs?

• A) Increase
• B) No change
• C) Decrease
• D) Cannot be determined from the information given

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Definitions:

Residual Value

The estimated scrap or salvage value of an asset at the end of its useful life.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset over time due to use, wear, or obsolescence.

Double-Declining-Balance

A method of accelerated depreciation that doubles the rate at which an asset loses value compared to straight-line depreciation.

Units-Of-Output

A depreciation method that allocates the cost of an asset based on the number of units it produces.