Which of the following is NOT a category of holding costs?

Holding costs are the expenses associated with storing unsold goods and maintaining inventory. They typically encompass several categories that directly affect the cost of maintaining inventory.

When considering the categories of holding costs, loss in value refers to the depreciation or decrease in market value of inventory over time, often due to factors like obsolescence or market conditions. Financial costs include the cost of capital tied up in inventory, such as interest expenses on loans used to purchase stock. Warehouse and materials handling costs involve expenses related to physical storage, including rent, utilities, labor for handling goods, and equipment used in the handling process.

Environmental costs, on the other hand, do not typically fall under the standard categories of holding costs. While they may influence business operations and could be considered in broader operational costs, they are not directly associated with the expenses of storing inventory itself. Thus, identifying environmental cost as not being a category of holding costs is accurate, as it does not relate directly to the financial or operational impacts of holding inventory in a traditional sense.