Figure 21-1 A Company Keeps 20 Days of Materials Inventory on Hand

question 84

Multiple Choice

Figure 21-1
A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average £4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average £2,000 per day.
-Refer to Figure 21-1. The nonvalue-added costs for the company are

• A)£80,000.
• B)£40,000.
• C)£20,000.
• D)£-0-.