If the Economic Order Quantity for an Item Is 140

question 41

Multiple Choice

If the economic order quantity for an item is 140, what is the average number of cycle inventory units?

• A) There are no units in cycle inventory.
• B) 70 units.
• C) 140 units.
• D) More than 140 units.

---

Definitions:

Transfer Price

The price at which divisions of a company transact with each other, such as the trade of supplies or labor between departments.

General Rule

A principle or guideline that applies broadly across different contexts or situations, often serving as a standard for decision-making.

External Sales Price

The price at which a product or service is sold to customers outside of the company, as opposed to internal transfer pricing within different divisions of the same company.

Opportunity Cost

Opportunity Cost refers to the potential benefits or income lost when choosing one alternative over another.