The significance of average inventory is that ________________ is a function of average inventory. Inventory is an (a) _______. Working capital is tied up in material rather than an alternative asset. _______________________as well as costs of storing, insuring, and handling are incurred when inventory exists.
A) opportunity cost / liability / Inventory costs
B) inventory cost / liability / Opportunity costs
C) inventory cost / asset / / Opportunity costs
D) inventory cost / asset / Shrinkage
E) opportunity cost / asset / Shrinkage

Question

Quizplus · Accepted Answer

The significance of average inventory is that inventory cost is a function of average inventory. Inventory is an asset. Working capital is tied up in material rather than an alternative asset. Inventory costs, as well as costs of storing, insuring, and handling, are incurred when inventory exists. Therefore, option C is the correct choice.

The Significance of Average Inventory Is That ________________ Is a Function