Question
Costs of \( \$ 12,500 \) were incurred to acquire goods and make them ready for sale. The for a cost of \( \$ 950 \). Additional necessary costs of \( \$ 1,900 \) were incurred to acquire the available. Compute the buyer's total cost of merchandise inventory. Multiple Choice \( \$ 15,350 \)
Ask by Newton Bowers. in the United States
Mar 20,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The buyer's total cost of merchandise inventory is \$15,350.
Solution
1. Identify the individual cost components:
- Purchase cost: \( \$12{,}500 \)
- Freight-in (transportation) cost: \( \$950 \)
- Additional necessary costs: \( \$1{,}900 \)
2. Compute the total cost of the merchandise inventory by summing the individual cost components:
\[
\text{Total Cost} = \$12{,}500 + \$950 + \$1{,}900
\]
3. Perform the calculation step by step:
\[
\$12{,}500 + \$950 = \$13{,}450
\]
\[
\$13{,}450 + \$1{,}900 = \$15{,}350
\]
Thus, the buyer's total cost of merchandise inventory is \( \$15{,}350 \).
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Simplify this solution Extra Insights
To determine the total cost of merchandise inventory, you need to add all costs associated with acquiring the goods. Start with the initial cost of goods, which is \( \$ 12,500 \). Then, you’ll add the additional necessary costs of \( \$ 1,900 \). This gives a subtotal of \( \$ 12,500 + \$ 1,900 = \$ 14,400 \). Next, include the cost incurred to acquire the goods for resale, which is \( \$ 950 \). Finally, add them up: \( \$ 14,400 + \$ 950 = \$ 15,350 \). So, the total cost of merchandise inventory is indeed \( \$ 15,350 \). Happy accounting!
