When the carrying cost of inventory is expressed as a percentage: A. it is usually the same as the borrowing cost of the organization. B. it must exclude the insurance cost of inventory. C. it usually exceeds 57.5 percent per year. D. the lower it is, the lower the economic order quantity. E. it is multiplied by the material unit cost to calculate the per unit carrying cost.

Business · High School · Sun Jan 24 2021

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When the carrying cost of inventory is expressed as a percentage:

E. It is multiplied by the material unit cost to calculate the per unit carrying cost.

The carrying cost of inventory, when expressed as a percentage, is often used to calculate the cost per unit of holding inventory. It's multiplied by the material unit cost to determine how much it costs to hold one unit of inventory for a certain period. This calculation helps in assessing the total cost of carrying inventory and informs decisions regarding the economic order quantity (EOQ) and inventory management strategies.






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