Asked by Alexandria Kunzler on Apr 29, 2024
Verified
Cost of goods purchased includes the:
A) purchase cost.
B) transportation inward cost.
C) storage cost.
D) purchase cost AND transportation inward cost.
Cost of Goods Purchased
The total expense for raw materials and goods acquired for resale by a company during a specific period, excluding any indirect costs.
Transportation Inward
Costs incurred to bring materials to a business, often included as part of inventory costs.
Purchase Cost
The amount paid to acquire goods or services, including the price of the item(s) and associated costs such as shipping and handling.
- Absorb the core principles of cost dispersal, concentrating on the allocation of indirect materials, pay for labor, and the determination of product costs.
Verified Answer
KS
Kalyn SchmidtApr 29, 2024
Final Answer :
D
Explanation :
Cost of goods purchased includes both the purchase cost and transportation inward cost, as these are necessary expenses to acquire the goods for resale. Although storage costs are associated with holding the goods, they are not part of the cost of goods purchased.
Learning Objectives
- Absorb the core principles of cost dispersal, concentrating on the allocation of indirect materials, pay for labor, and the determination of product costs.