Forums
Costing
Here why carrying cost percentage 10% taken on ₹228 Actually carrying cost should be applies on avg inventory value How to find average inventory value And why especially in this problem it's taken on 228 My brain is freezing I don't know the concept of what?
Answers (4)
Average inventory investment means amount invested on stock , which is nothing but price of the stock. This, in the given question purchase price is 228, Carryingcost 10% applied on the 228. Carryingcost generally is opportunity cost, therefore it should always applied on purchase price.
Pranay Mehta Faculty
2AO / C C = carrying cost p.u. p.a Total carrying cost = carrying cost p.u. p.a. * avg inventory
How avg inv. Can be calculated here
Thread Starter
SAI AKASH GORUHow avg inv. Can be calculated here
Average investment is nothing but amount invested to buy those gloves that is purchase price