If inventory is produced internally, the inventory-related costs are
A)ordering and carrying costs.
B)setup and carrying costs.
C)ordering and setup costs.
D)none of the above.

Question

Quizplus · Accepted Answer

If inventory is produced internally, the costs related to inventory will include setup costs (i.e. costs associated with preparing the production process), as well as carrying costs (i.e. costs associated with storing and managing inventory). Ordering costs do not apply in this scenario, as the inventory is being produced internally rather than being ordered from an external supplier.

If Inventory Is Produced Internally, the Inventory-Related Costs Are