A Job Order Cost System and a Process Cost System

question 121

True/False

A job order cost system and a process cost system are two alternative methods for valuing inventories.

---

Definitions:

Inventory Carrying Costs

The costs required to make or buy a product, including risk of obsolescence, taxes, insurance, and warehousing space used to store the goods.

Taxes

Mandatory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Insurance

A financial product sold by insurance companies to safeguard against financial risk and unforeseen losses.

Supply Chain Management

The actions the firm takes to coordinate the various flows within a supply chain.