Asked by Ashley Dominguez on Apr 25, 2024
Verified
All of the following are components of carrying costs except:
A) insurance.
B) storage costs.
C) deterioration.
D) set-up costs.
Carrying Costs
Carrying costs are the total expenses associated with holding or storing inventories over a certain period.
Set-Up Costs
Initial expenses incurred during the establishment of a new business or production line, including equipment and installation fees.
Storage Costs
Expenses associated with keeping goods in a warehouse or storage facility until they are sold or used.
- Analyze important inventory management concepts integral to financial management, specifically Economic Order Quantity (EOQ) and inventory holding costs.
Verified Answer
OG
Oyunbat Ganbat6 days ago
Final Answer :
D
Explanation :
Set-up costs are not a component of carrying costs. Rather, they are associated with ordering costs, which are incurred each time an inventory order is placed. The other options are all examples of carrying costs.
Learning Objectives
- Analyze important inventory management concepts integral to financial management, specifically Economic Order Quantity (EOQ) and inventory holding costs.
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