Mansoura University

ECON 331

20.1 Objective 20.1
1) Among different types of costs associated with inventory, the costs of obtaining purchase approvals are
________.
A) purchasing costs
B) ordering costs
C) stockout costs
D) carrying costs
Answer: B
2) Among different types of costs associated with inventory, the incoming freight charges of inventories are
________.
A) purchasing costs
B) ordering costs
c) stockout costs
d) carrying cost
Answer: A
3) Among different types of costs associated with inventory, the opportunity cost of the investment tied up in
inventory is a(n) ________.
A) purchasing cost
B) ordering cost
C) stockout cost
D) carrying cost
Answer: D
4) The costs that result from theft of inventory are ________.
A) shrinkage costs
B) external failure costs
C) stockout costs
D) costs of quality
Answer: A