Which One of the Following Statements Concerning the Economic Order

question 149

Multiple Choice

Which one of the following statements concerning the economic order quantity (EOQ) is TRUE?

• A)The EOQ is the order quantity that minimizes annual inventory holding costs.
• B)An increase in demand will increase the EOQ.
• C)The time between orders (TBO)will increase with an increase in holding costs.
• D)The EOQ formula assumes that there are only three relevant costs: holding,transportation,and setup.

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Definitions:

External Users

Individuals or entities outside of a company who utilize its financial statements for decision-making purposes, such as investors, creditors, and regulatory agencies.

Accounting Information

Accounting information encompasses all the data related to the financial transactions and status of an organization, used for reporting, decision-making, and regulatory purposes.

Equity

The ownership interest of shareholders, which is the value left in a company's assets after all debts have been paid off.

Revenues

The sum of money produced through standard business functions and additional actions.