The cost of preparing equipment and facilities so they can be used to produce a particular product or component is known as
A)ordering costs.
B)setup costs.
C)carrying costs.
D)inventory costs.

Question

Quizplus · Accepted Answer

Setup costs are the costs associated with preparing equipment and facilities for production. Ordering costs are associated with placing and receiving orders for materials or products, carrying costs are associated with holding inventory, and inventory costs refer to the cost of the inventory itself.

The Cost of Preparing Equipment and Facilities So They Can