A Company Keeps 20 Days of Materials Inventory on Hand

question 3

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.Moulding costs total $20,000.What are the value-added costs?

• A)$75,000
• B)$30,000
• C)$20,000
• D)$5,000

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Definitions:

Rigor Mortis

The stiffening of the muscles that occurs several hours after death due to chemical changes in the body.

Postmortem Care

The care given to a person's body after their death, which may include cleaning and dressing the body, and preparing it for viewing or burial.

Metastatic Cancer

Cancer that has spread from its original site to other parts of the body, often indicating an advanced stage of the disease.

Activity Surge

A sudden increase in physical or mental activity.