The Bead Boutique offers hand crafted jewelry for sale. In the weeks prior to Mothers Day, the owner purchased beads, strings, and clasps, from a company in Maine, to make her inventory. If the company in Maine pays for the shipping charges, how will the shipment be classified?

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The Bead Boutique offers hand crafted jewelry for sale. In the weeks prior to Mother’s Day, the owner purchased beads, strings, and clasps, from a company in Maine, to make her inventory. If the company in Maine pays for the shipping charges, how will the shipment be classified?

A	FOB department store
B	FOB destination
C	FOB shipping point
D	FOB transit

Explanation:

Detailed explanation-1: -The cost of goods sold is also known as cost of sales, which of the statements below are correct regarding costs of goods sold. The correct answer is, c the cost of goods sold is the expense of buying and preparing merchandise.

Detailed explanation-2: -The cost of inventory that is still on hand and has NOT been sold to customers is called: Inventory, a current asset that appears on the balance sheet. The ABC Company is preparing its financial statements on December 31. During the year, they purchased IBM stock for $20, 000.

Detailed explanation-3: -Cost of goods sold (COGS) is the direct cost of producing products sold by your business. Also referred to as “cost of sales, ” or “COGS report, ” COGS includes the cost of materials and labor directly related to the production and manufacturing of retail products.

Detailed explanation-4: -Usually the largest expense for a merchandiser is cost of goods sold. (This can also be called cost of sales.)

There is 1 question to complete.