If a Firm Decreases the Level of Inventory It Carries,the

question 62

Multiple Choice

If a firm decreases the level of inventory it carries,the order costs will ________ and the carrying costs will ________.

• A)decrease,decrease
• B)increase,increase
• C)decrease,increase
• D)increase,decrease
• E)remain unchanged,decrease

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Definitions:

Maintenance Department

A division within a company responsible for maintaining equipment, facilities, and systems to ensure efficient and safe operations.

Variable Costs

Costs that change in proportion to the level of production or business activity, such as raw materials and direct labor.

Fixed Costs

Expenses that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance premiums.

Transfer Price

The price at which divisions of a company transact with each other for goods or services.