Question

The cost of insurance and taxes are included in select one:
a. set up cost
b. cost of shortages
c. inventory carrying cost
d. cost of ordering

Answer 1

I think it's cost of ordering because we order and both insurance and taxes can be involved

Answer 2

Concept:

The total of all expenses related to storing of unsold inventory is known as the Inventory Carrying Cost.

Explanation:

• These costs are depicted as a percentage of a business’ total inventory during a particular time period.
• These assist in calculation of The Economic Order Quantity of the inventory of the firm.
• These include- the costs of warehousing, salaries, transportation and handling taxes, insurance, depreciation and shrinkage and opportunity costs.
• it is used by the businesses to see that how much income can be earned based on current inventory.

Hence, the correct option is Option C. That is,

The cost of insurance and taxes are included in the inventory cost.

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