Question

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 $100 for transportation-in, $120 for shipping insurance, $970 for car import duties

Answer 1

Given:

A car dealer acquires a used car for $14,000, with terms FOB shipping point.

Transportation cost = $100

Shipping insurance = $120

Car import duties = $970

To find:

The total inventory costs assigned to the used car.

Solution:

We know that,

Inventory costs = Value of used car + Transportation cost + Shipping insurance + Car import duties

Inventory costs = $14,000 + $100 + $120 + $970

Inventory costs = $15,190

Therefore, total inventory costs assigned to the used car is $15,190.