The Equation for Economic Order Quantity Shows That If the Holding

question 26

Multiple Choice

The equation for economic order quantity shows that if the holding costs are high,then ______.

• A)order quantities will be smaller to keep annual holding costs low
• B)order quantities will be larger to keep our annual holding costs low
• C)order frequency will be smaller to keep our annual holding costs low
• D)order frequency will remain the same,as it is not dependent on holding costs

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Definitions:

Reciprocal Services

Services exchanged between departments within an organization, used in cost accounting to allocate service department costs to producing departments.

Reciprocal Services

Services exchanged between departments within an organization or between companies without direct monetary payment, often valued and accounted for through internal mechanisms.

ABC

An abbreviation for Activity-Based Costing, a method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Direct Method

A cash flow statement preparation method that shows the specific sources of operating cash receipts and payments, contrasting with the indirect method.