is opportunity cost included in cost of carrying inventory?

Answer 1

Yes...when calculating carrying costs you would include an amount for the company's cost of capital. This is a percentage of the $ amount of inventory that would represent the return the company would get if it invested the cash, or interest saved if used to pay down debt, instead of spending it on inventory.

Answer 2

No. While opportunity cost goes into the decision of how much inventory to carry, it is NOT shown on financial records.