Purchasing departments utility bills is part of carrying costs.

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Purchasing department’s utility bills is part of carrying costs.

A	TRUE
B	FALSE

Explanation:

Detailed explanation-1: -Carrying costs are the various costs a business pays for holding inventory in stock. Examples of carrying costs include warehouse storage fees, taxes, insurance, employee costs, and opportunity costs.

Detailed explanation-2: -The answer is option no. 2 i.e. TRANSPORTATION COST.

Detailed explanation-3: -Purchase Cost means the total cost for the item(s) or service purchased including taxes, shipping costs and other fees, and contingencies.

Detailed explanation-4: -Carrying cost includes the cost of renting the warehouse where the stock is kept, operating the warehouse, paying the salaries of the employees working at the warehouse, any loss of inventory due to theft and damage, and insuring the inventory.

There is 1 question to complete.