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A firm calculates that its annual cost to hold excess goods in order to avoid any chance of running out of inventory is $50,000.

<p><em><strong>This $50,000 is an example of </strong></em></p> <p><em><strong>A. Prime cost. </strong></em></p> <p><em><strong>B. Quality cost. </strong></em></p> <p><em><strong>C. Carrying cost.</strong></em></p> <p><em><strong>D. Stockout cost.</strong></em></p>

Accounting Cost Accounting Financial Accounting Bank Accounting managerial accounting
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Question added by Deleted user
Date Posted: 2015/01/10
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Mobeen Tahir
by Mobeen Tahir , Credit Officer , Tawuniya Insurance

The Carrying cost id the right answer.

Ani Kuriakose
by Ani Kuriakose , Managing Partner – SCM , A. A. Associates

Cost to hold goods to avoid inventory stockout is Holding/Carrying cost

Muhammad Salman Akram Maan
by Muhammad Salman Akram Maan , Accountant , Bismillah Textiles Limited

Its C. Carrying Cost   Because company has to engage warehouse space for this excess inventory. 

Ahmer Zamir
by Ahmer Zamir , Consultant , Saleem Associates & Co

The Correct option is C) The Carrying Cost

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