Inventory Related Relevant Costs MCQ (Multiple Choice Questions) PDF Download

The required rate of return, is multiplied per unit cost of purchased units to calculate

1. irrelevant inventory carrying costs
2. relevant opportunity cost of capital
3. relevant purchase order costs
4. relevant inventory carrying costs

If the relevant opportunity cost of capital is $2950 and the relevant carrying cost of inventory is $6700, then the relevant incremental cost will be

1. $9,650
2. $2,350
3. $3,750
4. $2,750

The profit forgone by capital investment in inventory rather than investment of capital to somewhere else is classified as

1. relevant purchase order costs
2. relevant inventory carrying costs
3. irrelevant inventory carrying costs
4. relevant opportunity cost of capital

If the relevant incremental costs are $5000 and the relevant opportunity cost of invested capital is $2500, then the relevant inventory carrying costs would be

1. $7,500
2. $7,000
3. $6,500
4. $6,000

The relevant incremental costs are added into the relevant opportunity cost of capital to calculate

1. purchase order costs
2. relevant inventory carrying costs
3. irrelevant inventory carrying costs
4. relevant ordering costs