Questions: A car dealer acquires a used car for 18,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include - 100 for transportation-in. - 200 for shipping insurance. - 960 for car import duties. - 170 for advertising. - 1,700 for sales staff salaries. - 130 for trimming shrubs.

Solution Steps

To compute the total inventory costs assigned to the used car, we need to sum up the initial cost of the car and all additional costs that are directly related to acquiring and preparing the car for sale. These costs include transportation-in, shipping insurance, and import duties. Costs like advertising, sales staff salaries, and trimming shrubs are not included in the inventory cost.

The total inventory cost assigned to the used car includes the initial cost and additional costs related to acquiring the car. The relevant costs are:

• Initial cost of the car: \( \$18,000 \)
• Transportation-in: \( \$100 \)
• Shipping insurance: \( \$200 \)
• Import duties: \( \$960 \)

We sum the identified costs: \[ \text{Total Inventory Cost} = \text{Initial Cost} + \text{Transportation-in} + \text{Shipping Insurance} + \text{Import Duties} \] Substituting the values: \[ \text{Total Inventory Cost} = 18000 + 100 + 200 + 960 \]

Calculating the total: \[ \text{Total Inventory Cost} = 18000 + 100 + 200 + 960 = 19260 \]

Final Answer