Question

From a marginal analysis perspective, what is the inventory carry cost for Andrews if the company carries one additional unit of Able in inventory at the end? Select: 1 $1.92 $3.85 $9.98 $1.20

Answer 1

Using marginal analysis, the company's inventory carry cost is $1.20. This is because if we assume that this is the difference between the previous and current inventory count, converted to cost. The previous inventory should have a lower cost compared to the current inventory. 

Answer 2

Carrying cost or carrying cost of inventory is a term used in marketing that refers to holding inventory and the entire cost associated with doing so. The warehouse costs to hold the inventory, all costs associated with the items being held that range from salaries for employees, rent, opportunity costs for not selling the items are all considered when talking about carrying costs of holding inventory.