Required For each of the following events, determine the amount of freight paid

Question

Required For each of the following events, determine the amount of freight paid by Tom's whether the freight cost would be classified as a product or period (selling and administrative) cost. (Select NA" if there is no effect on the "Classificatio Part House. Also indicate a. Purchased inventory with freight costs of $500. The goods were shipped FOB shipping point b. Sold merchandise to a customer. Freight costs were c. Purchased merchandise inventory with freight costs of $1.400. The merchandise was shipped FOB 9300. The gods were shipped FOB shipping point destination Shipped merchandise to customers, freight terms FOB destination. The freight costs were s 300 d Costs Paid Classification a. C. d.

Explanation / Answer

FOB shipping point requires buyer to pay for freight charges

FOB destination requires seller to pay for freight charges.

Event Freight cost paid Classification a 500 Product cost b 0 NA c 0 NA d 300 Period cost

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