BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Storage costs are the amount of money incurred as a result of storing inventory. The costs could be direct or indirect money spent on the storage of goods. The storage costs may include costs for space, rent, electricity, software, depreciation and warehouse personnel.
Detailed explanation-2: -Under both IFRS and US GAAP, the costs that are excluded from inventory include abnormal costs that are incurred as a result of material waste, labor or other production conversion inputs, storage costs (unless required as part of the production process), and all administrative overhead and selling costs.
Detailed explanation-3: -Categorizing inventory costs Ordering costs (also called Setup costs) Carrying costs (also called Holding costs)