Investment return that is unrealized by stocking raw materials and finished goods can be classified as holding cost.

Question

Quizplus · Accepted Answer

Holding cost is a type of cost associated with storing and maintaining inventory. It includes costs such as storage, insurance, taxes, and opportunity cost of tying up capital in inventory. Investment return that is unrealized by stocking raw materials and finished goods is considered as opportunity cost and is therefore classified as holding cost.

Investment Return That Is Unrealized by Stocking Raw Materials and Finished