Indicate whether each of the following costs would be considered an ordering cost (O), a carrying cost

Question:

Indicate whether each of the following costs would be considered an ordering cost (O), a carrying cost (C), or a cost of not carrying (N) inventory. For any costs that do not fit these categories, indicate N/A for "not applicable."

a. Telephone call to supplier

b. Stationery and purchase order forms

c. Purchasing agent's salary

d. Purchase price of product

e. Goodwill of customer lost due to unavailability of product

f. Postage on purchase order

g. Freight-in cost on product

h. Insurance for products in inventory

i. Wages of receiving clerks

j. Preparing and issuing checks to suppliers

k. Contribution margin lost due to unavailability of product

l. Storage costs for products on hand

m. Quantity discounts on products ordered

n. Opportunity cost of funds invested in inventory

o. Property taxes on warehouses

p. Handling costs for products on hand

q. Excess ordering and shipping charges for rush orders of standard product lines

r. Spoilage of products awaiting use

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