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Exam CSCP topic 1 question 140 discussion

Actual exam question from APICS's CSCP
Question #: 140
Topic #: 1
[All CSCP Questions]

Which of the following cost elements typically would be included in the cost of carrying inventory?

  • A. Scrap during production
  • B. Depreciation of product equipment
  • C. Direct materials
  • D. Obsolescence
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Suggested Answer: C 🗳️

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winwin2022
Highly Voted 2 years, 2 months ago
CSCP learning book module 2, page 142 said: " the carrying cost include storage costs, capital cost and risk costs. Storage costs include allocations for rent, operating cost, taxes, material-handling costs, lease payments for equipment, deprecation, power costs." I think the correct answer should be B, depreciation of product equipment.
upvoted 7 times
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piotrusl
Highly Voted 2 years, 1 month ago
Direct materials is included in landing cost, so no C. Obsolescence itself could be although CSCP learning book lists "RISK of obsolescence" not the materialized obsolescence itself. Hence B (depreciation) is correct answer
upvoted 5 times
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Sam_San
Most Recent 1 year, 7 months ago
Selected Answer: C
that's make referece to transport stock (material cost)
upvoted 1 times
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flyover11300
1 year, 11 months ago
Answer should be D - Obsolescence. risk cost consists of write-off or write down due to obsolescence. Depreciation for storage and material handling equipment and assets would be part of storage cost not production equipment depreciation
upvoted 2 times
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TreborB
2 years, 2 months ago
I believe the answer is D as well because "direct materials are raw materials that are made into finished products. These are not materials that are used in the production process. Direct materials are goods that physically become the finished product at the end of the manufacturing process."
upvoted 1 times
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Rsbisou
2 years, 3 months ago
Why not D?
upvoted 2 times
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B (20%)
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