Certified Management Accountant Practice Exam 2025 - Free CMA Practice Questions and Study Guide

Ordering costs are associated with the expenses incurred when placing an order with a vendor. These costs encompass a wide variety of expenditures including the costs of processing purchase orders, shipping and handling fees, and any administrative costs related to ordering goods or services. Each time an order is placed, these costs are incurred, regardless of the volume of the order, and they can include both fixed costs (like the cost to prepare an order) and variable costs (such as shipping fees depending on the quantity ordered).

In contrast, stockout costs relate to the potential lost sales and customer dissatisfaction that occur when inventory runs out. Carrying costs represent expenses associated with holding inventory over time, such as storage, insurance, and spoilage. Purchase costs refer to the actual price paid for the goods themselves, which are part of the broader calculation of total inventory costs but do not directly relate to the act of ordering. Thus, ordering costs specifically refer to the costs tied to the procurement process, making them the correct answer in this context.