Total Ordering and Holding Costs

question 89

Multiple Choice

Total ordering and holding costs

• A)are relatively stable.
• B)are relatively stable around the economic order quantity.
• C)are relatively unstable around the economic order quantity.
• D)are unstable.

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in response to changes in production or sales volumes.

Billing Expense

Costs incurred during the billing process, including materials, postage, and labor costs related to preparing and sending out invoices to customers.

Contribution Format

A layout of the income statement that distinguishes between fixed and variable expenses to emphasize the contribution margin.

High-low Method

A technique in accounting used to estimate variable and fixed cost components of a cost by analyzing the highest and lowest activity levels.