Which of the following is a component of carrying cost?
A) Cost of capital.
B) Cost of storage.
C) Cost of obsolescence, deterioration, and loss.
D) All of these choices.
E) None of these choices.

Question

Quizplus · Accepted Answer

All three options listed (cost of capital, cost of storage, and cost of obsolescence, deterioration, and loss) are components of carrying cost. The cost of capital is the cost of financing inventory, the cost of storage includes rent, utilities, and any other expenses related to keeping inventory in a warehouse or storage facility, and the cost of obsolescence, deterioration, and loss covers any expenses related to damage or spoilage of inventory.

Which of the Following Is a Component of Carrying Cost