The decision model to calculate optimal quantity of inventory to be ordered is called ____________?
Correct answer: D. economic order quantity
- A. efficient order quantity
- B. optimized order quantity
- C. rational order quantity
- D. economic order quantity
Explanation
Economic order quantity, or EOQ, is the inventory model that balances ordering and carrying costs to determine the most economical order size. The other terms are not standard inventory-management models.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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