CPIM Practice Exam

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Prepare for the CPIM Exam with a comprehensive quiz that features insightful questions and real-time feedback. Enhance your knowledge and understanding of inventory and production management to pass your certification test with confidence!

Practice this question and more.

What type of costs would be included in carrying costs?

Costs associated with employee salaries
Costs related to shipping products
Costs for storing and maintaining inventory
Costs of direct material purchases

The correct answer is: Costs for storing and maintaining inventory

Carrying costs, also known as holding costs, encompass the expenses related to storing and maintaining inventory over a period of time. This includes a variety of factors such as warehousing costs, insurance, depreciation, and obsolescence, as well as the opportunity cost of the capital tied up in inventory. These costs can significantly influence inventory management decisions and overall financial performance. The inclusion of costs associated with employee salaries or direct material purchases falls into different categories of operational expenses and does not specifically pertain to the holding of inventory itself. Similarly, shipping costs are related to the movement of products rather than the ongoing costs of holding inventory. Thus, the focus on costs related to storing and maintaining inventory accurately reflects the nature of carrying costs.