Question
Costs of \( \$ 5,500 \) 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 \( \$ 250 \). Additional necessary costs of \( \$ 500 \) were incurred to acquire the goods. No other incentives or discounts were available. Compute the buyer's total cost of merchandise inventory. Multiple Choice
Ask by Rose Guerrero. in the United States
Mar 09,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The buyer's total cost of merchandise inventory is \$6,250.
Solution
1. The cost of goods acquired and ready for sale is given as \( \$5,500 \).
2. Since the shipment is FOB shipping point, the buyer is responsible for the shipping cost. Thus, the shipping cost of \( \$250 \) is added.
3. An additional \( \$500 \) of necessary costs was incurred to acquire the goods.
4. The total cost of the merchandise inventory is:
\[
\$5,500 + \$250 + \$500 = \$6,250.
\]
Thus, the buyer's total cost of merchandise inventory is \( \$6,250 \).
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Simplify this solution Beyond the Answer
To calculate the buyer's total cost of merchandise inventory, you need to add all the relevant costs incurred. This includes the acquisition cost of the goods, the shipping cost, and any additional necessary costs. So, the total cost would be: \[ \$ 5,500 + \$ 250 + \$ 500 = \$ 6,250 \] The buyer's total cost of merchandise inventory is \( \$ 6,250 \). Multiple Choice Options: A) \( \$ 5,500 \) B) \( \$ 5,750 \) C) \( \$ 6,250 \) D) \( \$ 6,500 \) Correct Answer: C) \( \$ 6,250 \)
