Arwen Company Has Correctly Computed Its Economic Order Quantity at 500

question 10

Multiple Choice

Arwen Company has correctly computed its economic order quantity at 500 units;however,management feels it would rather order in quantities of 600 units.How should Arwen's total annual order cost and total annual carrying cost for an order quantity of 600 units compare to the respective amounts for an order quantity of 500 units?

• A)Higher total order cost and lower total carrying cost
• B)Lower total order cost and higher total carrying cost
• C)Higher total order cost and higher total carrying cost
• D)Lower total order cost and lower total carrying cost

---

Definitions:

Nephridia

Excretory organs in many invertebrates, including annelids and mollusks, that filter fluid directly from the body cavity.

Mollusks

A diverse group of invertebrate animals with a soft body, many of which have a hard shell, including snails, clams, and squid.

Protonephridia

A type of excretory and osmoregulatory system found in some invertebrates, consisting of a network of tubules ending in flame cells.

Nephridia

Excretory organs in many invertebrates, such as annelids, functioning similarly to kidneys in vertebrates by removing waste materials.