86.All costs incurred prior to delivery of the product to the customer are referred to as upstream costs.
True False
87.Transportation costs incurred to transfer products to customers are downstream costs.
True False
88.Unlike manufacturers, service companies do not have an inventory of products.
True False
89.The primary difference between manufacturing companies and service companies is that the products provided by service companies are consumed immediately.
True False
90.A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers. Its product costs were $2,550.
True False
91.A manufacturing business paid $3,000 to purchase inventory. As a result, assets would increase by $3,000.
True False
92.A just-in-time system can lower inventory holding costs and increase customer satisfaction.
True False
93.The objective of a just-in-time inventory system is to totally eliminate all inventories.
True False
94.Just in time systems can be used by both manufacturing and merchandising companies.
True False
95.A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.
True False