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:

Realized Gross Profit

The portion of profit that has been earned from completed sales transactions, excluding unrealized profits from continuing transactions.

Bundled Sales Transactions

sales deals that involve multiple products or services sold together at a combined price, potentially affecting revenue recognition and reporting.

Revenue Recognition

The accounting principle that dictates the specific conditions under which revenue is recognized and recorded in the financial statements.

Right Of Return

A policy allowing customers to return purchased goods under certain conditions, often within a specific time frame.