Where are Transform and Return costs often captured in the supply chain, respectively?

Where are Transform and Return costs often captured in the supply chain, respectively?
A . Supply chain fixed assets and accounts receivable
B . Cost of goods sold (COGS) and claims
C . Supply chain fixed assets and accounts payable
D . Cost of goods sold (COGS) and warranty

View Answer

Answer: B

Explanation:

According to the CTSC exam content manual1, transform and return costs are two of the five cost categories in the SCOR model. Transform costs are the costs associated with converting raw materials into finished products, such as labor, materials, energy, depreciation, etc. Return costs are the costs associated with handling and disposing of defective or excess products, such as transportation, inspection, rework, recycling, etc. Transform costs are often captured in the cost of goods sold (COGS), which is the direct cost of producing the goods sold by a company. Return costs are often captured in claims, which are the expenses incurred by a company when customers return defective or unsatisfactory products.