Question

QS 6-2 Inventory costs LO C2 A car dealer acquires a used car for $16,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include $210 for transportation-in. $120 for shipping insurance. $860 for car import duties. $160 for advertising. $1,300 for sales staff salaries. $170 for trimming shrubs.

Answer 1

Answer:

$17,190

Explanation:

Costs that make up the cost of an asset are cost of purchase , sales tax , transportation , shipment insurance , import duties on items , assembly installation and all other costs incurred in making the assets ready for use.

Workings

Cost of purchase - 16,000

Transportation - in      210

Shipping insurance-    120

Car import duties -      860

Total cost                 17,190    

Other cost will the expensed as incurred