Which of the Following Is the Set of All Cost

question 16

Multiple Choice

Which of the following is the set of all cost components that make up the fixed-order-quantity total annual cost (TC) function?

• A) Annual purchasing cost, annual ordering cost, fixed cost
• B) Annual holding cost, annual ordering cost, unit cost
• C) Annual holding cost, annual ordering cost, annual purchasing cost
• D) Annual lead time cost, annual holding cost, annual purchasing cost
• E) Annual unit cost, annual setup cost, annual purchasing cost

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Definitions:

Production Contingencies

Unplanned or unexpected events that can affect the production process, requiring a company to adapt its resources or schedules.

Actual Costs

The true, total amount spent on goods or services, factoring in all relevant expenses.

Standard Costs

Predetermined costs assigned to goods and services, used as a benchmark for evaluating actual performance and cost control.

Normal Standards

Generally accepted benchmarks or criteria within a specific industry or area of business against which processes, products, or activities are measured.