MANAGEMENT

Detailed explanation-1: -Typical holding costs, another name for inventory carrying costs, vary by industry and business size and often comprise 20% to 30% of total inventory value, and it increases the longer you store an item before selling it.

Detailed explanation-2: -Ordering costs are the variable costs per unit of holding an item in inventory for a specific period.

Detailed explanation-3: -Definition of Depreciation Expense The depreciation of assets used in the manufacturing process are considered to be a product cost and will be allocated or assigned to the goods produced. The allocated depreciation will be included in the inventory cost of the goods manufactured until the goods are sold.

Detailed explanation-4: -A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company’s production or sales volume-they rise as production increases and fall as production decreases.