Question

Costs to transport inventory to retail locations are expensed immediately, before the inventory is sold. Group...

Costs to transport inventory to retail locations are expensed immediately, before the inventory is sold. Group of answer choices

True False

Business   Accounting   
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Homework Answers

Answer #1

Answer

FALSE

Explanation:

Cost of Inventory includes the following:

  • Warehousing costs
  • Insurance, repackaging, etc
  • Transportation costs

Such costs are included in the cost of inventory.

Cost of Inventory doesn't include the following:

  • Abnormal costs
  • Excessive spoilage costs in inventory,
  • Unallocated fixed costs

Such costs are expensed off immediately.

So, Transportation costs are are included in the cost of inventory and not expensed off.

In case of any doubt, please comment.

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