Ordering cost only consists of the shipping cost from supplier to customer. True or False

False

Explanation:

Ordering costs are the costs incurred when materials are requested for. These components of this cost are: - 1) Clerical and administrative costs involved in purchasing and accounting for the goods ordered.

2) Cost of transportation

3) Retooling cost: This happens when the product is manufactured internally. Retooling means change of working tools.

4) Insurance while in transit.

5) Drivers' salaries and allowances

6) Loss of materials while in transit.

7) Taxes, custom duties and import duties.

Answer: false

Explanation:

Ordering cost entails;

•Preparation of supplier's order

•Cost of placing the order is involved

•Documentation cost

•Inspection cost

Ordering cost handles expenses when purchasing an order, what is required to check the availability of the product ordered, and all other cost it would require when coordinating cost for a particular item requested from or by a customer.