contestada

For each of the following events, determine the amount of freight paid by THe Box Company. ALso indicate whether the freight cost would be classified as a product or period (selling and administrative) cost.
a. Purchased merchandise with freight costs of $650. The merchandise was shipped FOB shipping point.
b. Shipped merchandise to customers, freight terms FOB shipping point. The freight costs were $310.
c. Purchased inventory with freight costs of $1,500. The goods were shipped FOB destination.
d. Sold merchandise to a customer. Freight costs were $520. The goods were shipped FOB destination.

Respuesta :

jepessoa

Answer:

When FOB shipping point is used, buyer pays the freight. When FOB destination is used, the  seller pays the freight.

a. Purchased merchandise with freight costs of $650. The merchandise was shipped FOB shipping point.  

  • the Box Company is responsible for paying the freight charges ($650) and they are classified as product costs.

b. Shipped merchandise to customers, freight terms FOB shipping point. The freight costs were $310.

  • no freight costs

c. Purchased inventory with freight costs of $1,500. The goods were shipped FOB destination.

  • no freight costs

d. Sold merchandise to a customer. Freight costs were $520. The goods were shipped FOB destination.

  • the Box Company is responsible for paying the freight charges ($520) and they are classified as period costs.

Otras preguntas