The costs of issuing purchase orders, making of delivery records for tracking payments and costs of inspection of items are classified as _____________?
Correct answer: D. ordering costs
- A. stock-out costs
- B. purchasing costsCompare Credit Cards
- C. carrying costs
- D. ordering costs
Explanation
Issuing purchase orders, preparing delivery records, and inspecting received items are ordering costs because they arise from placing and processing an order. They are not costs of storing inventory.
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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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