Question

A solar panel dealer acquires is used panel for $12,400, with terms FOB shipping point. Compute total inventory cost assigned to the used panel if additional costs include $4,900 for sales staff salaries. $620 for transportation-in by train. $280 for online advertising. $390 for shipping insurance. $1,400 for used panel restoration. $1,150 for lawn care.

Answer 1

Answer:

$21,140

Explanation:

The computation of the total inventory cost is shown below:

= Acquired cost + Sales staff salaries + transportation-in costs by train +  online advertising costs + shipping insurance costs + used panel restoration costs + lawn care costs

= $12,400 + $4,900 + $620 + $280 + $390 + $1,400 + $1,150

= $21,140

All those costs which are related to the inventory cost are to be recognized.