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Nathan calculated his company's economic order quantity and categorized all production costs. One cost was related to the cost of storing milk
In the freezers, and another cost was related to the insurance expenses that covered the company's Inventory. To which cost category would
Nathan assign these costs?
Nathan would assign these costs to the
section of the economic order quantity.
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Based on the kind of costs they are, Nathan would assign them to the following sections of economic order quantity:

  • Cost of storing milk - Annual holding cost per unit.
  • Insurance expenses - Fixed cost per order.

What sections will the above costs fall under?

The cost of storing milk would go to the Annual holding cost because this is where storage costs are catered for. Economic Order Quantity aims to minimize storage costs so these must be accounted for.

Insurance expenses are fixed costs which means that they will go to the fixed cost the company incurs for every order they make.

Find out more on Economic Order Quantity at https://brainly.com/question/13386271.

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