Cost Accounts MCQ (Multiple Choice Questions) PDF Download

If an average inventory is 2000 units, annual relevant carrying cost of each unit is $5, then the annual relevant carrying cost will be

1. $5,000
2. $4,500
3. $5,500
4. $6,000

The costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as

1. carrying costs
2. purchasing costs
3. stock-out costs
4. ordering costs

The costs of goods acquired from suppliers are classified as

1. stock-out costs
2. ordering costs
3. carrying costs
4. purchasing costs

The costs of issuing purchase orders, making of delivery records for tracking payments and costs of inspection of items are classified as

1. stock-out costs
2. ordering costs
3. carrying costs
4. purchasing costs

The relevant ordering costs are added into relevant carrying costs to calculate

1. relevant total costs
2. contribution costs
3. throughput costs
4. optimized costs