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AICPA Exam CPA-Business Topic 3 Question 89 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 89
Topic #: 3
[All CPA-Business Questions]

Which one of the following would not be considered a carrying cost associated with inventory?

Show Suggested Answer Hide Answer
Suggested Answer: D

Choice 'd' is correct. Shipping costs (which are selling costs) would not be considered a carrying cost associated with inventory.

Choices 'a', 'b', and 'c' are incorrect. Each of the following would be considered a carrying cost associated with inventory.

A Insurance costs.

B Cost of capital invested in the inventory.

C Cost of obsolescence.


by Maricela at Jun 02, 2024, 12:39 AM

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Marjory
8 months ago
Shipping costs? What is this, a riddle? Next thing you know, they'll be asking if the cost of the warehouse itself is a carrying cost. Let's keep it simple, folks!
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Nieves
7 months ago
B) Cost of capital invested in the inventory.
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Brent
7 months ago
A) Insurance costs.
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Yoko
9 months ago
Shipping costs? Really? That's like saying the cost of buying the inventory in the first place is a carrying cost. Come on, this is basic inventory management stuff!
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Nobuko
8 months ago
C) Cost of obsolescence.
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Goldie
8 months ago
B) Cost of capital invested in the inventory.
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Isabelle
8 months ago
A) Insurance costs.
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Phung
9 months ago
Hmm, I'm not too sure about this one. Isn't shipping a cost associated with maintaining the inventory? I'll have to think about this one a bit more.
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Gary
9 months ago
I disagree, I believe the correct answer is C) Cost of obsolescence because it is not directly related to carrying the inventory.
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Pamela
9 months ago
Haha, this is easy! Shipping costs are definitely not a carrying cost. That's just the cost of getting the goods in the first place. The real carrying costs are the ones that keep the inventory on the shelves.
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Solange
9 months ago
Well, clearly the shipping costs are not a carrying cost. I mean, that's just the cost of getting the inventory to the warehouse, right?
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Ivette
8 months ago
C) Cost of obsolescence.
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Ashlyn
8 months ago
B) Cost of capital invested in the inventory.
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Arlene
8 months ago
C) Cost of obsolescence.
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Carey
8 months ago
B) Cost of capital invested in the inventory.
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Dewitt
8 months ago
A) Insurance costs.
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Bernardo
8 months ago
C) Cost of obsolescence.
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Ashley
8 months ago
B) Cost of capital invested in the inventory.
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Mammie
9 months ago
A) Insurance costs.
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Pearly
9 months ago
A) Insurance costs.
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Marti
9 months ago
I think the answer is D) Shipping costs.
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