The Cost of Inventory Currently Owned by a Company Is

question 30

Multiple Choice

The cost of inventory currently owned by a company is an example of a (n) :

• A) opportunity cost.
• B) sunk cost.
• C) relevant cost.
• D) differential cost.
• E) future cost.

---

Definitions:

Safety Inventory

Extra inventory kept on hand to protect against uncertainties in demand or supply.

Product Availability

The extent to which goods or services can be purchased or accessed as desired by customers at a given time.

Customer Purchases

Transactions where consumers buy goods or services from businesses, exchanging money for products.

Excessive Inventory

A larger amount of stock than what is needed, leading to unnecessary storage costs and potential obsolescence.