Question

Which of the following does NOT belong to holding​ costs? A. order processing B. storage costs C. ​pilferage, scrap, and obsolescence D. insurance on inventory

Answer 1

Answer:

A) Order processing

Explanation:

Holding costs are costs that result from keeping inventory in storage. In this case, order processing is related to sales, and sales mean more inventory turnover, exactly the opposite to inventory accumulation.

The other costs described in the question are holding costs: storage costs is self-explanatory, most likely being rent. Pilferage, scrap and obsolescence costs result from inventory depreciation, and insurance is paid to protect the firm's inventory from a hazard such as fire or robbery.