Accounting Dictionary - Letter C

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Carrying costs
(also called holding costs) are costs incurred for carrying inventory. Examples of carrying costs include money tied up in inventory (i.e., lost interest), storage costs, insurance premiums, taxes, inventory obsolescence and spoilage. Carrying costs increase as the inventory level increases. Total carrying costs plus total ordering costs equal total inventory costs.
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