Question

Carlton Company purchases​ $8,000 of inventory with shipping​ terms, FOB Portland. Carlton is based in Seattle and the supplier is based in Portland. The shipping costs are​ $450. What is the cost of​ Carlton's inventory?

Answer 1

nventory= $8,450

Step-by-step explanation:

Giving the following information:

Carlton Company purchases​ $8,000 of inventory with shipping​ terms, FOB Portland. Carlton is based in Seattle and the supplier is based in Portland. The shipping costs are​ $450.

FOB Portland means that the responsibility of the goods changes in the moment of shipping load. In this case, the responsibility of Carlton starts in Portland. Therefore, the shipping costs are part of the inventory cost.

Inventory= 8,000 + 450= $8,450