Describe Costs With Ordering And Maintaining Inventory?

An ordering costing system is used in situations where many different products, or batches of products, are produced each period. Examples of industries that typically use job-order costing include shipbuilding, special-order printing, home building and furniture manufacturing. Job-order costing is also used in many service businesses, such as repair shops, advertising agencies, and law firms. For example, a firm uses job-order costing to determine the amount to bill each client. Likewise, an advertising agency uses job-order costing to determine the total amount to charge a client for an advertising campaign. To illustrate the design and operation of a job-order costing system, suppose Turbo Flex, a small fitness equipment company, manufactures the Turbo flex II, a total-body workout machine.
                Most of Turbo Flex's production results from orders from specific customers, such as retail department stores and sporting goods stores. However, the company does manufacture a few units for stock; that I, it manufactures a few units to maintain on hand as a minimum level of inventory. Turbo Flex is organized into three major divisions: Administration, Production and Marketing. The production division is divided into five departments: Shaping, Assembling, Finishing, Maintenance and General Factory Services.