Answer:
Social media permits hotel managers to get immediate and direct feedback from their clients, so they can understand better their needs and wants. On the other hand, social media can have a negative effect too.
Explanation:
Hopes this helps
1. Managerial Internal (Inside) accounting information reports are generally prepared for A) Stockholders or Shareholders B) Creditors, Lenders, or Banks C) Managers. D) Regulatory Agencies, like the IRS or SEC
Answer:
C) Managers
Explanation:
Managerial accounting is the accounting that concern with the information received via financial accounting inside the organization. The accouting reports that could be applied for planning, decision making and measuring the performance of the company
So if the managerial accounting information reports are prepared internally so it is for the managers to analyze the overall performance of the organization
Hence, the option c is correct
A company has two segments with total sales of $500,000 and total variable costs of $343,750. Traceable fixed expenses are $50,000 and common fixed expenses are $80,000. The break even in dollars for the company as a whole equals $ _______. (Enter your answer as a whole number.)
Answer:
$416,000
Explanation:
The computation of the break even in dollars for the company is given below:
Total fixed expenses = Traceable fixed expenses + Common fixed expenses
= $50,000 + $80,000
= $130,000
Now
Contribution margin ratio = (Sales - Variable costs) ÷Sales × 100
= ($500,000 - $343,750) ÷ $500,000 × 100
= 31.25%
Now
Break-eve dollars = Fixed expenses ÷ Contribution margin ratio
= $130,000 ÷ 31.25%
= $416,000
Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours. Required: a. For 2013, the company's cost accountant estimated that total overhead costs incurred would be $461,100 and that a total of 53,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. (Round your answer to 2 decimal places.)
Answer:
Predetermined manufacturing overhead rate= $8.7 per direct labor hour
Explanation:
Giving the following information:
Estimated that total overhead costs= $461,100
Estimated total direct labor hours= 53,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 461,100 / 53,000
Predetermined manufacturing overhead rate= $8.7 per direct labor hour
A company purchased a computer system at a cost of $26,000. The estimated useful life is 8 years, and the estimated residual value is $4,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year
Answer:
the depreciation expense for the second year is $4,875
Explanation:
The calculation of the depreciation expense for the second year is given below:
First the depreciation rate should be
= 1 ÷ 8 × 2
= 25%
Now the first year depreciation is
= $26,000 × 25%
= $6,500
Now the second year depreciation should be
= ($26,000 - $6,500) × 2
= $4,875
Hence, the depreciation expense for the second year is $4,875
Two national companies both sell a variety of soaps and lotions. When looking at the balance sheets, one company lists goodwill as an asset, but the other company does not. What does this tell you about these companies
Answer: A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business.
Explanation:
Goodwill is the value over a company's net value that it is purchased for. For instance, if a company is worth $15,000 but was purchased for $20,000, $5,000 is the goodwill.
A company only expresses goodwill in its books when it has purchased another company for more than the company's value and when the balance sheets of the purchaser and the purchased were consolidated, the goodwill is therefore shown.
If the first company has goodwill as an asset then it means that it has purchased a company before unlike the second company which has not purchased any company as of yet.
Goodwill is referred to as intangible assets and is associated with the reputation of the firm. The goodwill depends on the gradual growth of the company at the variable stages. It is the purchase or acquisition of the assets at fair value and acquiring limited liabilities for the better growth of the company.
The correct option for the answer is A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business.
Options A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business is correct because the first company has made the decision to expand by owning it and getting some of the major investors from the market for the investment as well.
Options:
B. The first company regularly donates to charitable causes, whereas the second company does not donate to charitable causes.
C. The first company purchased patents above market value to expand their product line, whereas the second company likely developed all of their patents in-house.
D. The first company added research and development costs as an intangible asset, whereas the second company expensed their research and development costs immediately
These options are wrong because they do not specify the correct meaning of the sentence in the context. They are verifying the other concept as compared to the context.
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Newhard Company assigns overhead cost to jobs on the basis of 114% of direct labor cost. The job cost sheet for Job 313 includes $26,530 in direct materials cost and $10,500 in direct labor cost. A total of 1,400 units were produced in Job 313.
Required:
a. What is the total manufacturing cost assigned to Job 313?
b. What is the unit product cost for Job 313?
Answer:
Results are below.
Explanation:
Giving the following information:
Estimated overhead rate= 114% of direct labor cost.
Job 313:
Direct materials= $26,530
Direct labor= 10,500
Number of units= 1,400
First, we need to allocate overhead to Job 313:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 10,500*1.14= $11,970
Now, the total cost:
Total cost= 26,530 + 10,500 + 11,970
Total cost= $49,000
Finally, the unitary cost:
Unitary cost= 49,000 / 1,400
Unitary cost= $35
Air Destinations issues bonds due in 10 years with a stated interest rate of 11% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 12%. Using present value tables, calculate the issue price of the bonds
Answer: $471,324.61
Explanation:
Price of a bond = Present value of coupon payments + Present value of face value at maturity
Coupon payments = 500,000 * 11% * 1/2 years = $27,500
Periodic yield = 12%/ 2 = 6% per semi annual period
Periods = 10 * 2 = 20 semi annual periods
Coupon payment is constant so it is an annuity.
Price of bond = Present value of annuity + Present value of face value at maturity
= (Annuity * Present value interest factor of Annuity, 6%, 20 years) + Face value / (1 + rate) ^ number of periods
= (27,500 * 11.4699) + 500,000 / (1 + 6%)²⁰
= $471,324.61
To reduce your chances of identify theft you should
a.
carry your Social Security Card in your wallet.
b.
check your credit rating regularly.
c.
only use drive thru ATM’s.
d.
never keep receipts with credit information printed on them.
To reduce your chances of identify theft you should: d. never keep receipts with credit information printed on them.
What is identity theft?Identity theft can be defined as the way in which person tend to make use of another person personal data or information so as to defraud people or to commit a crime.
This person can either make use of the person name, credit card numbers among others to commit a fraudulent act by impersonating the owner without the awareness of the person that owns the information.
In order to reduce the identify theft it is advisable that a person should never keep receipts that has details of their credit information printed on them as a fraudster can make use of the information to defraud or to commit crime.
Therefore To reduce your chances of identify theft you should: d. never keep receipts with credit information printed on them.
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For each of the five transactions described below, indicate which account should be debited and which account should be credited:
Cost of Goods Sold Direct Labor
Finished Goods Manufacturing Overhead
Raw Materials Salaries and Wages Pavable
Transaction Debit Credit
1. Direct materials are issued into production for a specific job
2. Salary of the Production Supervisor is payable
3. Lubricating oil, waste cotton, and solder are used in the factory
4. The wages of direct laborers who worked on a particular job are payable
5. Manufacturing overhead is applied to jobs using a predetermined overhead rate
Answer:
1. Direct materials are issued into production for a specific job
Debit ⇒ Work in Process Inventory
Credit ⇒Raw Materials inventory
2. Salary of the Production Supervisor is payable
Debit ⇒ Manufacturing overhead
Credit ⇒ Wags Payable
3. Lubricating oil, waste cotton, and solder are used in the factory
Debit ⇒ Manufacturing overhead
Credit ⇒ Raw materials inventory
4. The wages of direct laborers who worked on a particular job are payable
Debit ⇒ Work in process
Credit ⇒ Wages payable
5. Manufacturing overhead is applied to jobs using a predetermined overhead rate
Debit ⇒ Work in process inventory
Credit ⇒Manufacturing overhead
Cantor Corporation acquired a manufacturing facility on four acres of land for a lump-sum price of $8,000,000. The building included used but functional equipment. According to independent appraisals, the fair values were $4,500,000, $3,000,000, and $2,500,000 for the building, land, and equipment, respectively. The initial values of the building, land, and equipment in the general ledger would be:
Answer:
Land= 27,000,000
Equipment= 22,500,000
Building= 4,050,000
Explanation:
The first step is to calculate the total fair value
= 4,500,000+3,000,000+2,500,000
= 10,000,000
Therefore the initial volume of the land can be calculated as follows
= 9,000,000(3,000,000/10,000,000)
= 9,000,000×3
= 27,000,000
Initial value of the equipment is
= 9,000,000(2,500,000/10,000,000)
= 9,000,000(2.5)
= 22,500,000
Initial value of the building is
= 9,000,000(4,500,000/10,000,000)
= 9,000,000(0.45)
= 4,050,000
The following data relate to product no. 33 of La Quinta Corporation: Direct labor standard: 5 hours at $14 per hour Direct labor used in production: 45,000 hours at a cost of $639,000 Manufacturing activity: 8,900 units completed The direct-labor rate/price variance is:
Answer:
$9,000 (Unfavorable)
Explanation:
The computation of the direct-labor rate/price variance is given below:
Given that
Actual time used = 45,000 hours
Actual cost of labor used = $639,000
Now
Actual rate = Actual cost of labor used ÷ Actual time used
= $639,000 ÷ 45,000
= $14.2 per hour
And,
Standard rate = $14 per hour
Standard time = 5 hours per unit
Actual output = 8,900 units
So, standard time for actual output = 8,900 × 5
= 44,500
Now
Direct labor rate variance = Actual time × (Standard rate - Actual rate)
= 45,000 × (14 - 14.2)
= $9,000 (Unfavorable)
Please describe an effective leadership style
Business leaders can improve employee engagement and satisfaction, stimulate creativity and productivity, and ultimately accomplish the aims and objectives of the organization by using a transformational leadership style.
What is transformational leadership style?A leadership style known as transformational leadership focuses on inspiring and encouraging followers to produce amazing achievements that go above and beyond what they had anticipated. By establishing a vision and uniting people around it, it is a leadership strategy that aims to transform both people and organizations. The skill of inspiring and motivating others to accomplish at their highest level and realize their full potential is a trait of transformational leaders.
Transformational leaders are able to express their compelling future vision in a way that inspires and motivates others. They are endowed with charisma and the capacity to enthrall and sway their audience.
Setting high standards and pushing their followers to go beyond their own boundaries are two ways that transformational leaders inspire and encourage their followers.
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The complete question is:
Please describe an effective leadership style in a business
XYZ Co. reported the following results for October: Sales $ 32,000 Cost of goods sold (all variable) $ 6,000 Total variable selling expense $ 2,500 Total fixed selling expense $ 4,700 Total variable administrative expense $ 1,800 Total fixed administrative expense $ 3,000 The contribution margin for October is:
Answer:
See below
Explanation:
Given the information above,
Contribution margin = Sales - Variable expenses
Sales = $32,000
Variable expenses = Total variable selling expenses + Total variable administrative expenses
= $2,500 + $1,800
= $4,300
Therefore,
Contribution margin = $32,000 - $4,300
Contribution margin = $27,700
Therefore, the contribution margin for October is $27,700
MC Qu. 101 The following information... The following information describes a company's usage of direct labor in a recent period. The direct labor rate variance is: Actual hours used 46,000 Actual rate per hour $ 16 Standard rate per hour $ 15 Standard hours for units produced 48,000
Answer:
$46,000 Unfavorable
Explanation:
Calculation to determine what The direct labor rate variance is:
Using this formula
Direct labor rate variance = Actual hours * ( Actual Rate - Standard Rate)
Let plug in the formula
Direct labor rate variance=46000*($16- $15)
Direct labor rate variance=46,000*$1
Direct labor rate variance=$46,000 Unfavorable
Therefore The direct labor rate variance is: $46,000 Unfavorable
A lower inflation rate will decrease the after-tax real interest rate when the government taxes nominal interest income.
a. True
b. False
False, SHOULD INCREASE after-tax real interest rates.
Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:
Cost Drivers by Product Activity Cost Pool Ordering and Receiving Machine Setup Machinine Assembly Inspection Cost Driver Estimated Overhead Budget Deluxe $130,000 Orders Setups Machine hours Parts 400 400 150,000 100,000 600 297,000 500 1,000,000 600,000 1,200,000 800,000 300,000 550 450
Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. (Round overhead cost per unit to 2 decimal places, eg. 12.25 and cost assigned to O decimal places, eg. 2,500)
Overhead cost per unit
Budget S per unit
Deluxe $ per unit
Answer:
Randel Manufacturing
Overhead cost per unit
Budget $2.81 per unit
Deluxe $6.80 per unit
Explanation:
a) Data and Calculations:
Cost Drivers by Product
Activity Cost Pool Cost Driver Estimated Budget Deluxe
Overhead
Ordering and Receiving Orders $130,000 600 400
Machine Setup Setups 297,000 500 400
Machining Machine hours 1,000,000 150,000 100,000
Assembly Parts 1,600,000 1,200,000 800,000
Inspection Inspections 300,000 550 450
Cost Pool Overhead Rates
Ordering and Receiving $130 ($130,000/1,000) per order
Machine Setup $330 ($297,000/900) per setup
Machining $4 ($1,000,000/250,000) per machine hour
Assembly $0.80 ($1,600,000/2,000,000) per part
Inspection $300 ($300,000/1,000) per inspection
Estimated Rates Budget Deluxe
Overhead
Ordering and Receiving $130 $78,000 $52,000
Machine Setup $330 165,000 132,000
Machining $4 600,000 400,000
Assembly $0.80 960,000 640,000
Inspection $300 165,000 135,000
Total overhead costs $1,968,000 $1,359,000
Production units 700,000 200,000
Overhead per unit $2.81 $6.80
Standish Company manufactures consumer products and provided the following information for the month of February:
Units produced 131,000
Standard direct labor hours per unit 0.20
Standard fixed overhead rate (per direct labor hour) $2.50
Budgeted fixed overhead $65,000
Actual fixed overhead costs $68,300
Actual hours worked 26,350
Required:
a. Calculate the fixed overhead spending variance using the formula approach.
b. Calculate the volume variance using the formula approach.
Answer and Explanation:
The computation is shown below:
a. Fixed overhead Spending Variance is
= Budgeted Fixed Overhead - Actual Fixed overhead
= $65000 - $68300
= - $3300 (unfavorable)
b.
Fixed Overhead Volume Variance is
= (131000 × 0.20 × $2.50) - $65000
=$65500 - $65000
= $500 Favorable
In this way these can be determined
Which assertion relates to the following statement? "Assets, liabilities, and equity interests are included in the financial statements at appropriate amounts
Answer: Valuation
Explanation:
The assertion that assertion relates to the statement that Assets, liabilities, and equity interests are included in the financial statements at appropriate amounts is the valuation assertion.
According to the assertion of accuracy and valuation, it simply means that all the figures that are presented in a financial statement are known to be accurate and are based on proper valuation of the assets, the liabilities and the equity balances
What is the IRR, assuming an industrial building can be purchased for $250,000 and is expected to yield cash flows of $18,000 for each of the next five years and be sold at the end of the fifth year for $280,000
Answer:
9.2%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-250,000
Cash flow in year 1 = $18,000
Cash flow in year 2 = $18,000
Cash flow in year 3 = $18,000
Cash flow in year 4 = $18,000
Cash flow in year 5 = $18,000 + $280,000
IRR = 9.2%
To determine IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
A 2-year Treasury security currently earns 1.94 percent. Over the next two years, the real risk-free rate is expected to be 1.00 percent per year and the inflation premium is expected to be 0.55 percent per year. Calculate the maturity risk premium on the 2-year Treasury security.
Answer:
cacagada
Explanation:
Universal Air is a no-growth firm and has two million shares outstanding. It expects to earn a constant $20 million per year on its assets. If it has no debt, all earnings are paid out as dividends, and the cost of capital is 10 percent, calculate the current price per share of the stock.
Answer:
$100/share
Explanation:
Calculation to determine the current price per share of the stock.
First step
EPS = DPS = $20,000,000/($20,000,000*10%)
EPS = DPS = $20,000,000/$2,000,000
EPS = DPS = $10 per share
Now let determine the current price per share of the stock
P0 = 10/0.10
P0= $100/share
Therefore current price per share of the stock is $100/share
A logical way to allocate building maintenance costs to departments would be based on: Select one: A. Machine hours B. Number of employees C. Labor hours D. Square feet of floor space
Answer: D. Square feet of floor space
Explanation:
The building maintenance cost should be based on a measure that takes into account the size of the building so that the maintenance cost can be apportioned based on how much space needs to be maintained.
The best measure to do so would therefore be the square feet of floor space. If maintenance cost is assigned per square feet, it would take into account how much expenses are being incurred to maintain the entire size of the building.
Myers Corporation has the following data related to direct materials costs for November: actual cost for 5,000 pounds of material at $4.50 per pound and standard cost for 4,800 pounds of material at $5.10 per pound. The direct materials price variance is a.$3,000 favorable b.$2,880 unfavorable c.$3,000 unfavorable d.$2,880 favorable
Answer:
a. $3,000 favorable
Explanation:
Calculation to determine the direct materials price variance
Using this formula
Direct materials price variance=Actual costs(Standard costs per pound- Actual costs per pound)
Let plug in the formula
Direct materials price variance=5,000($5.10-$4.50)
Direct materials price variance=5,000($0.6)
Direct materials price variance=
$3,000 favorable
Therefore Direct materials price variance is $3,000 favorable
George has been selling 8,000 T-shirts per month for $8.00. When he increased the price to $9.00, he sold only 7,000 T-shirts.
Which of the following best approximates the price elasticity of demand?
A. -1.2467
B. -1.02
C. -0.5667
D. -1.1333
Suppose George's marginal cost is $3 per shirt.
Before the price change, George's initial price markup over marginal cost was approximately
A. 0.5625
B. 0.375
C. 0.625
D. 0.6875
George's desired markup is?
A. 1.3235
B. 0.7941
C. 0.9706
D. 0.8824
Since George's initial markup, or actual margin, was (LESS OR GREATER) than his desired margin, raising the price was (PROFITABLE OR NOT PROFITABLE).
Answer:
a. The best approximates the price elasticity of demand is -1.1333. Therefore, the correct option is D. -1.1333.
b. George's Initial price markup over marginal cost = 0.625. Therefore, the correct option is C. 0.625.
c. George's desired markup = 0.8824. Therefore, the correct option is D. 0.8824.
d. Since George's initial markup, or actual margin, was LESS than his desired margin, raising the price was PROFITABLE.
Explanation:
a. Which of the following best approximates the price elasticity of demand?
Price elasticity of demand = Percentage change in quantity demanded / Percentage change in price ................ (1)
Where, based on the midpoint formula, we have:
Percentage change in quantity demanded = {(New quantity demanded – Old quantity demanded) / [(New quantity demanded + Old quantity demanded) / 2]} * 100 = {(7000 - 8000) / [(7000 + 8000) / 2]} * 100 = -13.3333333333333%
Percentage change in price = {(New price - Old price) / [(New price + Old price) / 2]} * 100 = {(9 - 8) / [(9 + 8) / 2]} * 100 = 11.7647058823529%
Substituting the values into equation (1), we have:
Price elasticity of demand = -13.3333333333333% / 11.7647058823529% = -1.13333333333333
Approximated to 4 decimal places, we have:
Price elasticity of demand = -1.1333
This implies that the best approximates the price elasticity of demand is -1.1333.
Therefore, the correct option is D. -1.1333.
b. Suppose George's marginal cost is $3 per shirt. Before the price change, George's initial price markup over marginal cost was approximately.
George's Initial price markup over marginal cost = (Initial selling price - marginal cost) / Initial selling price = ($8 - $3) / $8 = 0.625
Therefore, the correct option is C. 0.625.
c. George's desired markup is?
George's desired markup = 1 / Absolute value of price elasticity of demand BEFORE approximation to 4 decimal places = 1 / 1.13333333333333 = 0.88235294117647
Approximated to 4 decimal places, we have:
George's desired markup = 0.8824
Therefore, the correct option is D. 0.8824
d. Since George's initial markup, or actual margin, was (LESS OR GREATER) than his desired margin, raising the price was (PROFITABLE OR NOT PROFITABLE).
George's Initial price markup over marginal cost = 0.625
George's desired markup = 0.8824
Therefore, we have:
Since George's initial markup, or actual margin, was LESS than his desired margin, raising the price was PROFITABLE.
Wang Co. manufactures and sells a single product that sells for $540 per unit; variable costs are $324 per unit. Annual fixed costs are $836,000. Current sales volume is $4,290,000. Management targets an annual pre-tax income of $1,215,000. Compute the unit sales to earn the target pre-tax net income.
Answer: 9,495 units
Explanation:
First find the contribution margin:
= Sales price - Variable cost
= 540 - 324
= $216 per unit
The unit sales required can be calculated by the formula:
= (Annual pre-tax income target + Fixed cost) / Contribution margin
= (1,215,000 + 836,000) / 216
= 9,495.37 units
= 9,495 units
Macrozine Inc. provides support for employees faced with ethical dilemmas. An ethics compliance officer is available in the Human Resources office or through an employee hotline. This is an example of ethical:_________
a. reasoning
b. awareness
c. whistle-blowing
d. action
Answer:
d. action
Explanation:
In Business, this would be an example of ethical action. These are actions that companies take in order to prove that they are committed to their employees. Especially making sure that they are safe, respected, and mentally/emotionally good within the work environment. By providing such services such as an employee hotline and a HR department they are providing resources for the employees to voice their concerns and needs in case of any dilemma in the company.
Supply is more elastic over long periods than over short periods because:_____.
a. producers can make more adjustments in the long run than in the short run.
b. consumers can make fewer adjustments in the long run than in the short run.
c. producers can make fewer adjustments in the long run than in the short run.
d. consumers can make more adjustments in the long run than in the short run.
Answer:
A
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = percentage change in quantity supplied / percentage change in price
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
Supply is inelastic if a small change in price has little or no effect on quantity supplied. The absolute value of elasticity would be less than one
The short run is a period where all factors of production are fixed. In the short run, a firm would continue to produce if price is above average variable cost. If this is not the case, it would shut down
The long run is a period where all factors of production are varied. It is known as the planning time for a company
Supply is more elastic in the long run than in the short run because the producer can make adjustments in the long run
The government sector balance is equal to net taxes ________ government expenditure on goods and services. If that number is ________, a government sector surplus is lent to other sectors; if that number is ________, borrowing from other sectors must finance a government deficit.
Answer:
less
positive
negative
Explanation:
The government sector balance is income from taxes less government spending
Government sector deficit occurs when government spending exceeds income of the government.
When deficit increases, debt increases. This is because a deficit would need to be funded by additional borrowing
When there is a surplus, government spending is less than the income of the government. Government is able to lend to other sectors
Edgar accumulated $5,000 in loan debt. If the interest rate is 20% per year and he does not make any payments for 2 years, how much will he owe on this debt in 2 years for quarterly compounding? Round your answer to the nearest cent Do NOT round until you calculate the final answer.
Answer:
Edgar
The amount he will owe on this debt in 2 years for quarterly compounding is:
= $7,387.28
Explanation:
Accumulated loan debt = $5,000
Interest rate per year = 20%
Period of loan = 2 years
Interest compounding = quarterly
From an online financial calculator:
N (# of periods) 8
I/Y (Interest per year) 20
PV (Present Value) 5000
PMT (Periodic Payment) 0
Results
FV = $7,387.28
Total Interest $2,387.28
The Economic Order Quantity is when: holding costs equal ordering costs total costs are minimized the product cost is not considered to determine the quantity to be purchased all of the above none of the above
Answer: all of the above
Explanation:
At the Economic Order Quantity level, the company is enjoying the lowest cost possible in relation to product ordering and storage because they are ordering just enough quantities that they are able to sell them just in time to order some new goods.
For this to happen, the holding cost must be equal to the ordering costs. At the EOQ, the product cost is irrelevant when the quantity to be bought is to be determined because it is minimized.
