Which of the Following Is an Example of Carrying Cost

question 95

Multiple Choice

Which of the following is an example of carrying cost?

• A) insurance of goods in transit
• B) transportation cost
• C) insurance cost
• D) cost of inventory

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Definitions:

Administrative Expenses

Costs related to the general operations of a company, such as salaries of non-production staff, office supplies, and utilities.

Merchandise Inventory

Goods a company holds for the purpose of resale in the normal course of business.

Product Costs

These are costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses incurred by a business that are not directly tied to the production process and are charged to the period in which they occur.