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Question

Inventory holding cost may include ___________________.

A
Material purchase cost
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B
Penalty charge for default
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C
Interest on loan
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D
None of the above
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Solution

The correct option is D None of the above
Inventory holding cost is that cost which is incurred by the organization to hold the unsold inventory. This cost includes the cost of storing the inventory, ordering cost, cost of storage space, cost of insurance of the inventory.

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