The Allianz Company Produces a Specialty Wood Furniture Product, and Has

question 10

Multiple Choice

The Allianz Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:

Annual demand is 30,000 packages per year. The purchase price per package is $53.
Which of the following statements is true of Allianz's EOQ system costs?

• A) At EOQ, the annual relevant ordering costs is exactly the half of annual relevant carrying costs.
• B) At EOQ, the annual relevant carrying costs is higher than the annual relevant ordering costs.
• C) At EOQ, the annual relevant carrying costs is exactly the half of the annual relevant total costs.
• D) At EOQ, the annual relevant carrying costs is equal to the annual relevant total costs.

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Definitions:

Stock Dividend

A payment made to shareholders in the form of additional shares rather than cash.

Average Investor

Typically refers to a non-professional or retail investor who participates in the markets but may not have extensive knowledge or resources.

Stock Price

The cost of purchasing a single share of a particular stock, representing the market's valuation of a company at any given time.

Common Stock Dividend

Payments made to shareholders out of a company's earnings, reflecting a portion of the profit allocated for each share of common stock.