Question

Zonker Inc. purchases 500 units of an item at an invoice cost of $30,000. What is the cost per unit? If the goods are shipped f.o.b. shipping point and the freight bil was $1,500, what is the cost per unit if Zonker Inc. pays the freight charges? If these items were bought on 2/10, n/30 terms and the invoice and the freight bill were paid within the 10-day period, what would be the cost per unit? If an additional purchases was made after this and the only thing that changed was the invoice cost increased to $35,000, what would be the effect on the unit cost if the inventory is accounted for on the FIFO basis? What about LIFO basis?

Answer 1

1	The cost per unit	$60.00
	($30,000/500)
2	The Cost per unit with freight	$63.00
	($30,000 + $1,500)/500
3	The Cost per unit with freight and discount	$61.80
	[($30,000 + $1,500) - $30,000 x 0.02]/500
4	The Cost per unit with freight and discount and additional purchase	$131.80
	[($30,000 + $1,500) - $30,000 x 0.02]/500 + $35,000/500
	Inventory is accounted for on the FIFO basis or LIFO basis cost per unit will the same.