Which of the following is a component of carrying cost?
A) Cost of capital.
B) Cost of storage.
C) Cost of obsolescence, deterioration, and loss.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

All of the options listed are components of carrying cost. Cost of capital refers to the interest or opportunity cost of funds used to finance inventory. Cost of storage refers to costs associated with storing inventory such as rent, utilities, and insurance. Cost of obsolescence, deterioration, and loss refers to the costs associated with inventory becoming obsolete, deteriorating, or being lost or stolen.

Which of the Following Is a Component of Carrying Cost