A Company Keeps 20 Days of Materials Inventory on Hand

question 60

Multiple Choice

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 the figure..What would be the non-value-added costs?

• A)$5,000
• B)$30,000
• C)$75,000
• D)$80,000

---

Definitions:

Noncash Transfers

A mode of transferring wealth or benefits without the exchange of physical cash, often utilized in government assistance programs.

Income Distribution

The way in which total income is shared among individuals or groups within an economy, impacting economic equality.

Labor Market Discrimination

The unfair treatment of workers based on race, gender, age, or other non-job-related characteristics, affecting hiring, wages, and promotion.

Nation's GDP

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.