1. In inventory management, a decrease in the frequency of ordering will normally

1. Increase total carrying costs
2. Increase total ordering costs
3. Have no effect on total carrying costs
4. Have no effect on total ordering costs

2. Which of the following statement is false?

1. The cost of inventory itself, as well as any quantity discounts lost on inventory purchases, is directly reflected in the EOQ model.
2. A decrease in inventory order cost will decrease the EOQ
3. An increase in inventory carrying cost will decrease the EOQ
4. An increase in the variable cost of placing and receiving an order will increase the EOQ

3. EOQ formula does not assume that

1. Demand is known
2. Usage is uniform
3. Cost of placing an order is constant
4. Cost of inventory itself is constant 4. Method which allocates cost of support department to only operating department is called
5. Indirect method
6. Direct method
7. Step-down method
8. Reciprocal Method

4. Method which allocates cost of support department for operating departments by recognizing all mutual services provided is classified as

1. Indirect method
2. Direct method
3. Step-down method
4. Reciprocal Method

5. When production (in units) decreases, the average cost per unit of product increases. This increase in the average cost per unit is due to the

1. Increase in variable cost per unit
2. Increase in fixed cost per unit
3. Increase in total variable costs
4. Increase in total fixed costs