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AICPA CPA-Business Exam - Topic 2 Question 70 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 70
Topic #: 2
[All CPA-Business Questions]

All of the following are inventory carrying costs, except:

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Suggested Answer: D

Choice 'd' is correct. Inspections. Inspections are part of order costs, not carrying costs.

Choices 'a' and 'c' are incorrect. Inventory carrying costs include all costs associated with warehousing (storing) inventory (e.g., storage, insurance, obsolescence, and spoilage associated with holding inventory).

Choice 'b' is incorrect. The economic cost of holding inventory includes the implicit (opportunity) cost of foregoing a return on the money invested in inventory.


by Paz at May 24, 2023, 02:09 PM

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Harley
4 months ago
Opportunity cost is a big one, can't overlook that!
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Reynalda
4 months ago
Obsolescence and spoilage definitely count as carrying costs.
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Veda
4 months ago
Wait, are we sure about that? Inspections seem costly too.
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Shakira
4 months ago
Totally agree, it's more about quality control.
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Mee
4 months ago
Inspections aren't really a carrying cost.
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Madelyn
5 months ago
I’m leaning towards D for inspections, but I could be wrong. I just remember that carrying costs usually relate to holding inventory.
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Shala
5 months ago
I practiced a similar question where we had to identify costs, and I feel like inspections might be more of an operational cost.
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Luisa
5 months ago
I think insurance, opportunity cost, and obsolescence definitely count as carrying costs, but inspections seem different.
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Rasheeda
5 months ago
I remember discussing inventory carrying costs, but I'm not sure if inspections are really considered a carrying cost.
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Golda
5 months ago
I'm a little confused by the wording of this question. Mutual redistribution at multiple locations sounds tricky. I'm not sure if changing the router ID is the right solution here. I'll need to review the OSPF concepts again before deciding.
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Stephane
5 months ago
I feel like we practiced a question similar to this one, and I think creating a Route Control Profile was involved.
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Malika
5 months ago
The key here is ensuring the carrier invoices follow the required process. I'll focus on that as I evaluate the choices.
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Gilma
5 months ago
Hmm, I'm a bit unsure about this one. I'll need to think through the implications of adding a permanent HR department versus a more flexible solution.
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Catalina
5 months ago
I'm not entirely sure, but I think fair use applies when you use something for educational purposes? However, since this was for a college newspaper and they charged for it, maybe not.
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Art
5 months ago
I keep mixing up the syntax. I feel like I saw something about the Webex API before, but I can't recall the exact URL we need here.
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