Question

A car dealer acquires a used car for $8,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include

• $190 for transportation-in.
• $120 for shipping insurance.
• $1,000 for car import duties.
• $180 for advertising.
• $1,400 for sales staff salaries.
• $160 for trimming shrubs.

Answer 1

The Inventory cost assigned to the car is "$ 9310".

	Cost	Included In Inventory Cost	Expensed as incurred
Cost	$ 8000	$ 8000
Transportation - in	$ 190	$ 190
Important duties	$ 1000	$ 1000
Insurance during shipment	$ 120	$ 120
Advertising	$ 180		$ 180
Sales staff salaries	$ 1400		$ 1400
Trimming shrubs	$ 160		$ 160
Total	$ 11050	$ 9310	$ 1740

the cost assigned to the car includes = $ 8000 + $ 190 +  $ 120 + $ 1000
= $ 9310

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