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

question 30

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 21-2. The value-added costs would be

• A)£100,000.
• B)£10,000.
• C)£5,000.
• D)£-0-.

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