The carrying cost consists of the following three cost components:

Question

Quizplus · Accepted Answer

The carrying cost typically consists of three major cost components: obsolescence cost, storage cost, and capital cost. The cost of obsolescence is associated with the items becoming obsolete, outdated, or unusable. The storage cost includes costs associated with maintaining and storing inventory items, including labor, utilities, and rent. Capital cost includes the opportunity cost of capital invested in the company's inventory. Therefore, option C accurately reflects the major components of the carrying cost.

The Carrying Cost Consists of the Following Three Cost Components