Which of the following is typically included in ordering costs?

Which of the following is typically included in ordering costs?

• A. Transmitting the order
• B. Receiving the product
• C. Processing the invoice
• D. Carrying the inventory

Answer: (D)

Ordering costs are the expenses that occur as you initiate and complete a purchase before the goods are actually stored. Transmitting the order is part of getting the request to the supplier, and receiving the product involves the labor and inspection needed when it arrives. Processing the invoice covers the administrative work to pay and reconcile the order. Carrying the inventory, on the other hand, is a holding cost that accrues while items are kept in stock, not during the ordering process. So the elements that are typically included in ordering costs are transmitting the order, receiving the product, and processing the invoice; carrying the inventory is not part of ordering costs.

Ordering costs are the expenses that occur as you initiate and complete a purchase before the goods are actually stored. Transmitting the order is part of getting the request to the supplier, and receiving the product involves the labor and inspection needed when it arrives. Processing the invoice covers the administrative work to pay and reconcile the order. Carrying the inventory, on the other hand, is a holding cost that accrues while items are kept in stock, not during the ordering process. So the elements that are typically included in ordering costs are transmitting the order, receiving the product, and processing the invoice; carrying the inventory is not part of ordering costs.