A company wants more control over their inventory costing. Which two statements regarding the Landed Cost setup are true?

One key aspect of managing inventory costing effectively in a company involves understanding how to utilize the Landed Cost feature within NetSuite. When assessing the correctness of the statement regarding the requirement for both the Inventory Item and the Landed Cost Item to be marked as Landed Cost = True, it is clear that this designation is fundamental for the Landed Cost functionality to be applied correctly.

When both the inventory item and the associated landed cost item are set to "Landed Cost = True," it allows the system to allocate additional costs—like shipping, handling, or taxes—to the items received. This improves the accuracy of inventory valuation because it reflects all costs associated with bringing the inventory to a sellable state. Without this setup, the costs would not be properly captured and allocated, potentially leading to misconceptions about the true cost of goods sold when calculating profitability.

The other statements, while informative, do not convey the essential setup requirements that ensure the accurate application of landed costs. The understanding of these criteria is crucial for firms that wish to maintain precise control over their inventory costs.