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24 votes
24 votes
A car dealer acquires a used car for $14,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include

$250 for transportation-in.
$300 for shipping insurance.
$900 for car import duties.
$150 for advertising.
$1,250 for sales staff salaries.
$180 for trimming shrubs.
For computing inventory, what cost is assigned to the used car? Included in Inventory Cost Expensed as incurred Cost 14.000 900 Cost Transportation in Import duties Insurance during shipment Advertising Sales staff salaries 300 150 1,250 16.850S 0 $

User DejaVuSansMono
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1 Answer

12 votes
12 votes

Answer: $15,450

Step-by-step explanation:

The inventory cost of the car is every cost that was incurred to get it to the car dealer and ready for sale.

Total inventory cost assigned is:

= Cost of car + transportation-in + shipping insurance + car import duties

= 14,000 + 250 + 300 + 900

= $15,450

User Maqueda
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2.7k points