COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Among different types of costs associated with inventory, the costs of obtaining purchase approvals are ____
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purchasing costs
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ordering costs
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stockout costs
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holding costs
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Explanation:
Detailed explanation-1: -The three inventory cost categories There are three primary categories of inventory costs: ordering, carrying, and stockout costs. Understanding these different types of costs associated with inventory can help you understand the best ways to track, manage, and calculate the total costs of your inventory investment.
Detailed explanation-2: -Ordering costs are the expenses your company incurs to purchase and receive the products it stocks in its inventory. These ordering costs can include shipping fees, unexpected transportation costs, inspection fees and other expenses necessary to acquire inventory products.
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