Inventory Related Relevant Costs Multiple Choice Questions with Answers – PDF Download

MCQ 1: 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

MCQ 2: 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

MCQ 3: 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

MCQ 4: 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

MCQ 5: 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