Indicate whether the following statements are true or false. (a) the reasoning behind abc cost allocation is that products consume activities and activities consume resources. (b) activity-based costing is an approach for allocating direct labor to products. (c) in today’s increasingly automated environment, direct labor is never an appropriate basis for allocating costs to products. (d) a cost driver is any factor or activity that has a direct cause-effect relationship with resources consumed. (e) activity-based costing segregates overhead into various cost pools in an effort to provide more accurate cost information.

Thomas kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. thomas's fastest-moving inventory item has a demand of 6,000 units per year. the cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. the average ordering cost is $30 per order. it takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (this is a corporate operation, and the are 250 working days per year.)a) what is the eoq? b) what is the average inventory if the eoq is used? c) what is the optimal number of orders per year? d) what is the optimal number of days in between any two orders? e) what is the annual cost of ordering and holding inventory? f) what is the total annual inventory cost, including cost of the 6,000 units?