Question

Which of the following is not a cost element as part of the inventory carrying costs?

a. insurance costs
b. property taxes
c. purchase order preparation costs
d. storage costs

Answer 1

Purchase order preparation costs do not fall under inventory carrying costs, which usually include insurance costs, property taxes, and storage costs.

Step-by-step explanation:

The cost element that is not part of the inventory carrying costs is purchase order preparation costs. Inventory carrying costs typically include expenses such as insurance costs, property taxes, and storage costs. These are costs associated with holding or maintaining inventory. Purchase order preparation is part of the ordering costs, not the carrying costs.