Question

1 Exercise 5-2 Inventory costs LO C2 nts Walberg Associates, antique dealers, purchased goods for $38,300. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $1,600. Walberg Associates insured the shipment at a cost of $230. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $570. Determine the cost of inventory. eBook Cost of inventory Hint Ask Total cost of inventory eferences

Answer 1

Determination of the cost of inventory:

Cost of inventory
Purchase cost of goods	$38300
Transportation cost	$1600
Insurance cost on shipping	$230
Cost of Cleaning and refurbishing	$570
Total cost of inventory	$40700

Cost of inventory includes

- purchase cost

- any freight, transport and storage costs

- any other incidental costs in related to sale the goods

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