Ordering cost refers to the expense of placing an order for additional inventory and does not include the cost or expense of the product itself.

Question

Quizplus · Accepted Answer

Ordering costs are the costs incurred in placing an order for inventory, such as the cost of preparing and processing a purchase order, transportation costs, receiving and inspection of goods, etc. They do not include the cost of the actual products or materials being ordered.

Ordering Cost Refers to the Expense of Placing an Order