Which of the following statements is TRUE?
A) Fixed costs associated with any ordering are relevant.
B) Sunk costs associated with any ordering are irrelevant.
C) Variable costs associated with inventory holding are irrelevant.
D) Variable costs associated with ordering are irrelevant.

Question

Quizplus · Accepted Answer

Sunk costs, which are costs that have already been incurred and cannot be recovered, are not relevant in decision making. The other statements are false, as fixed costs and variable costs associated with ordering and inventory holding are important factors to consider in inventory management.

Which of the Following Statements Is TRUE