ECONOMICS

Detailed explanation-1: -Define cost types. Define activities and activity costs. Define material overhead defaults. Define item and item costs, and establish item cost controls.

Detailed explanation-2: -Cost Management supports four perpetual costing methods: Standard Costing, Average Costing, FIFO Costing, and LIFO Costing. You can use the Average Costing method for one organization and the Standard Costing method for another organization. See: Standard and Average Costing Compared.

Detailed explanation-3: -Examples of order costs include the costs of preparing a requisition, a purchase order, and a receiving ticket, stocking the items when they arrive, processing the supplier’s invoice, and remitting the payment to the supplier.

Detailed explanation-4: -Ordering costs are the expenses your company incurs to purchase and receive the products it stocks in its inventory. These ordering costs can include shipping fees, unexpected transportation costs, inspection fees and other expenses necessary to acquire inventory products.