All costs that do not vary with the size of the order but are incurred each time an order is placed are referred to as
A)the material cost and are denoted by C.
B)the fixed ordering cost and are denoted by S.
C)the holding cost and are denoted by H.
D)the purchase price and are denoted by P.

Question

Quizplus · Accepted Answer

The costs described in the question are known as fixed ordering costs, which are incurred each time an order is placed regardless of the order size. These costs include things like order processing, transportation, and purchase order preparation. Therefore, the correct choice is B, as it refers to fixed ordering costs.

All Costs That Do Not Vary with the Size of the Order