Table 15.4
Bowring Ball Bearings has 10 different items in its inventory. The average number of units held in inventory and the average unit cost are listed for each item. The firm uses an ABC system of inventory control
-In the EOQ model, ________ costs are the fixed clerical cost of writing a purchase order, processing the paper work, and verifying the invoice.
A) basic
B) order
C) carrying
D) processing

Question

Table 15.4
Bowring Ball Bearings has 10 different items in its inventory. The average number of units held in inventory and the average unit cost are listed for each item. The firm uses an ABC system of inventory control 
-In the EOQ model, ________ costs are the fixed clerical cost of writing a purchase order, processing the paper work, and verifying the invoice.
A) basic 
B) order 
C) carrying 
D) processing

Quizplus · Accepted Answer

The fixed clerical cost of writing a purchase order, processing the paperwork, and verifying the invoice is known as the order cost in the EOQ model. Therefore, the best choice is B.

Table 15.4 Bowring Ball Bearings Has 10 Different Items in Its Inventory