The costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as ___________?
Correct answer: A. carrying costs
- A. carrying costs
- B. purchasing costs
- C. stock-out costs
- D. ordering costsCompare Credit Cards
Explanation
Carrying costs arise from holding inventory and include storage, spoilage, obsolescence, insurance and financing costs. Ordering costs relate instead to placing and receiving purchase orders.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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