Profit forgone by capital investment in inventory rather than investment of capital to somewhere else is classified as
A. relevant purchase order costs
B. relevant inventory carrying costs
C. irrelevant inventory carrying costs
D. relevant opportunity cost of capital
Answer: Option D
Solution(By Examveda Team)
Profit forgone by capital investment in inventory rather than investment of capital to somewhere else is classified as relevant opportunity cost of capital.Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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