Question

To take into account the effects of transportation on total cost, we replace item cost (C) with item cost plus transit rate (C + Cm) in the total annual cost equation.

a. True
b. False

Answer 1

The statement is true(a). The total annual cost equation includes the item cost plus the transit rate to account for transportation effects on cost.

Step-by-step explanation:

The statement that C + Cm is substituted for C in the total annual cost equation to take into account the effects of transportation on total cost is true(a).

When calculating total annual cost, it is important to consider the cost of transportation in addition to the item cost. By adding the transit rate (Cm) to the item cost (C), we can accurately account for the effects of transportation on total cost.