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Business Arithmetic — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipBusiness Arithmetic3 Marks
Question
What are Order Processing Costs?
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Answer

The cost is associated with the placement of an order for the acquisition of inventories. It is determined on the basis of expenses incurred in the purchase department. Some of the components of cost are:
  1. Finding the sources of supply.
  2. Obtaining quotations.
  3. Transportation cost.
  4. Expenses and follow up of an order (stationery, stamp).
  5. Forgone discounts.
  6. Loss of sales and customer goodwill.

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