Costs that increase as a firm acquires additional current assets are called ________ costs.
A) carrying
B) shortage
C) order
D) safety
E) trading

Question

Quizplus · Accepted Answer

Carrying costs are expenses that increase as the firm holds more current assets such as inventory, accounts receivable, and cash. Examples of carrying costs include storage fees, insurance, and obsolescence. As the firm acquires more current assets, these costs increase.

Costs That Increase as a Firm Acquires Additional Current Assets