The Carrying Cost for Inventory Consists of Which Cost Components

question 26

Multiple Choice

The carrying cost for inventory consists of which cost components?

• A) Capital cost, obsolescence cost, and ordering cost.
• B) Obsolescence cost, capital cost, and stockout cost.
• C) Obsolescence cost, storage cost, and capital cost.
• D) Storage cost, handling cost, and obsolescence cost.

---

Definitions:

Monthly Compounded

Monthly Compounded refers to the process of applying interest to an initial sum and its previously accumulated interest at monthly intervals.

GIC

Guaranteed Investment Certificate; a Canadian investment that offers a guaranteed rate of return over a fixed period.

Maturity Value

The amount payable to an investor at the end of a fixed term investment, including principal and interest.

Monthly Compounded

A reiteration indicating that the interest accrues on a monthly basis, thereby increasing the investment or loan amount through compounding.