Due to unprecedented growth during the year Denise's Flowers decided to use some of its surplus cash to increase the size of several inventory order quantities that had been previously determined using an EOQ model.
Required:
For each of the following items tell whether the increase in order size caused an increase, a decrease, or no change.
-cost of goods sold

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) model is used to minimize the total holding costs and ordering costs. Changing the order size does not directly affect the cost of goods sold (COGS), as COGS is determined by the cost of acquiring or manufacturing the goods that are sold during a period. Increasing the order size might affect inventory holding costs or ordering costs, but it does not directly change the cost of the goods themselves.

Due to Unprecedented Growth During the Year Denise's Flowers Decided