Which of the Following Is Never Included in Direct Materials

question 108

Multiple Choice

Which of the following is never included in direct materials costs?

• A) Invoice costs of direct materials.
• B) Outgoing delivery charges.
• C) Materials storage costs.
• D) Materials handling costs.
• E) Insurance on stored material.

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Definitions:

Inventory

The stock of goods or materials that a business holds at any given time, including raw materials, work-in-process, and finished goods.

Vendor-Managed Inventory

A replenishment strategy where the supplier is responsible for maintaining the inventory levels of their products at the customer's location.

Outsourcing

The business practice of hiring external vendors to perform services or produce goods that were previously handled internally, often to reduce costs or focus on core competencies.

Benchmark Firms

Companies that are considered to be the best in their industry or category and whose practices are used as a standard or comparison in benchmarking studies.