Ending Inventory Is Calculated by Multiplying the Number of Units

question 98

True/False

Ending inventory is calculated by multiplying the number of units on hand by the unit cost.

---

Definitions:

In-Transit Inventory Cost

refers to the cost associated with inventory items that are in the process of being transported from the supplier to the buyer.

Vidalia Onions

A specific variety of sweet onion grown exclusively in a designated area of Georgia, known for its unique flavor.

Safety Inventory

Additional stock that a company holds to prevent stockouts and ensure product availability, acting as a buffer against demand fluctuations.

Holding Cost

The expenses associated with keeping inventory in storage, including warehousing costs, insurance, depreciation, and potential obsolescence.