Asked by Shubhansh Singh on May 09, 2024
Verified
Incidental costs for acquiring merchandise inventory,such as import duties,freight,storage,and insurance,should not be added to the cost of inventory.
Incidental Costs
Minor or secondary costs that are associated with purchasing or manufacturing a product but not directly allocable to production costs.
Merchandise Inventory
Goods available for sale to customers, categorized as a current asset on a company's balance sheet.
- Recognize the components and calculations involved in determining the cost of inventory.
Verified Answer
OH
Odobor HeartMay 11, 2024
Final Answer :
False
Explanation :
Incidental costs for acquiring merchandise inventory, such as import duties, freight, storage, and insurance, should be added to the cost of inventory as they are necessary expenses to bring the inventory to its present location and condition, ready for sale.
Learning Objectives
- Recognize the components and calculations involved in determining the cost of inventory.
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