The Simplest Inventory Financing Method Is a Blanket Inventory Lien

question 111

True/False

The simplest inventory financing method is a blanket inventory lien where items are not identified or tagged, and there is no physical transfer of control of the inventory from the borrower.

---

Definitions:

Selling and Administrative Expenses

Expenses related to the sale of products or services and the general administration of a business, excluding production costs.

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remain constant regardless of the level of production, such as depreciation on factory equipment or salaries of factory supervisors.

Unit Product Cost

represents the total cost to produce one unit of product, including direct materials, direct labor, and overhead.

Fixed Manufacturing Overhead

encompasses the consistent, non-varying costs of producing goods, such as factory lease or salary of supervisors, linked but differently phrased to fixed manufacturing expenses.