Question

Costs of $6,500 were incurred to acquire goods and make them ready for sale. The goods were shipped to the buyer (FOB shipping point) for a cost of $350. Additional necessary costs of $700 were incurred to acquire the goods. No other incentives or discounts were available. What is the buyer’s total cost of merchandise inventory?

Answer 1

Total cost of merchandise inventory = $7,550

Step-by-step explanation:

The total cost of merchandise inventory, is the sum total of all the costs incurred in the acquisition of the goods, and it is calculated as shown below:

cost of goods = $6,500

cost of shipping = $350

Additional necessary cost = $700

∴ Total cost of merchandise inventory = cost of goods + cost of shipping + Additional necessary cost

Total cost of merchandise inventory = 6,500 + 350 + 700 = $7,550