Question

In the​ single-period inventory​ model, the overage cost is
A. salvage value per unit.
B. sales price per unit minus cost per unit.
C. cost per unit minus salvage value per unit.
D. cost per unit minus sales price per unit.

Answer 1

Answer: Option (C)

Explanation:

Under single-period inventory​ model,

Overage cost = Cost/unit - Salvage value/unit

Single-period inventory model is referred to as or known as a business situation faced by the organization that tends to order seasonal items. There tends to be the costs which occur to both ordering too little or too much, and thus organization's managers tries to get its order correct for the first time in order to minimize chances of loss.