The total restocking cost is calculated as:
A)Fixed cost per order × Number of orders.
B)Order size × Variable cost per unit.
C)Carrying costs + Fixed costs.
D)Number of orders × Variable cost per unit.
E)Fixed cost per unit × Average inventory.

Question

Quizplus · Accepted Answer

The total restocking cost is the sum of the fixed cost involved in placing orders and the variable cost involved in holding inventory. Since the question asks for the total restocking cost, the correct option is A, which involves the fixed cost per order multiplied by the number of orders.

The Total Restocking Cost Is Calculated As