Which cost estimates the rate at which the value of the product being stored drops either because the market value of that product drops or because the product quality deteriorates?

Question

Quizplus · Accepted Answer

Obsolescence (spoilage) cost estimates the rate at which the value of the product being stored drops either because the market value of that product drops or because the product quality deteriorates. Choice A, Cost of capital, is the cost of borrowing money; choice C, Handling cost, is the cost of moving and processing goods; choice D, Occupancy cost, is the cost of renting or owning warehouse space.

Which Cost Estimates the Rate at Which the Value of the Product