A Firm Sells 4,500 Units of an Item Each Year

question 35

Multiple Choice

A firm sells 4,500 units of an item each year.The carrying cost per unit is $2.15 and the fixed costs per order are $69.What is the economic order quantity?

• A)374 units
• B)421 units
• C)497 units
• D)537 units
• E)623 units

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Definitions:

Net Income

A company's remaining earnings after deducting all taxes and costs from the complete revenue.

Income Splitting

A tax strategy used to transfer income from a higher-tax-rate taxpayer to a lower-tax-rate taxpayer to reduce the total tax paid.

Salary Allowances

Additional monetary benefits provided to employees on top of their regular salary, potentially for specific purposes or expenses.

Capital Account

An account on a country's balance of payments that records transactions involving the purchase and sale of assets, representing changes in ownership of international assets.