Reference no: EM132775689

Question 1: The EOQ model is a deterministic model that calculates the ideal order quantity (or production lot for ELS) given specific period demand, the cost per order or production run, and the periodic carrying cost per unit. The EOQ model

a. Minimizes the sum of inventory carrying costs and ordering costs

b. Minimizes the sum of ordering costs only

c. Minimizes the sum of carrying costs and handling costs

d. Minimizes the level of average inventory in units

Question 2: Statement 1: In ABC, each activity cost pool identified must identify its own cost driver in order to compute for the activity's overhead rate.

Statement 2: ABC system will always yield a higher cost assignment of overhead as compared to traditional costing

a. Both statements are true

b. Both statements are false

c. Only statement 1 is true

d. Only statement 2 is true