[amp_mcq option1=”relevant purchase order costs” option2=”relevant inventory carrying costs” option3=”irrelevant inventory carrying costs” option4=”relevant opportunity cost of capital” correct=”option4″]<\/p>\n
The correct answer is D. relevant opportunity cost of capital.<\/p>\n
The opportunity cost of capital is the return that could have been earned on an investment if it had been made in another project. In this case, the opportunity cost of capital is the profit that could have been earned if the capital had been invested in another project instead of inventory.<\/p>\n
A. Relevant purchase order costs are the costs of placing an order for inventory, such as the cost of the purchase order itself and the cost of any shipping or handling charges.<\/p>\n
B. Relevant inventory carrying costs are the costs of holding inventory, such as the cost of storage space, the cost of insurance, and the cost of obsolescence.<\/p>\n
C. Irrelevant inventory carrying costs are the costs that would be incurred regardless of whether or not the company holds inventory, such as the cost of the materials used to produce the inventory.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”relevant purchase order costs” option2=”relevant inventory carrying costs” option3=”irrelevant inventory carrying costs” option4=”relevant opportunity cost of capital” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-45858","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n