Answer:
Total inventory cost is $9,965.
Step-by-step explanation:
The terms free on board FOB shipping point implies that the delivery of a good is taken by the buyer after it left the supplier's shipping dock. Therefore, any other relevant cost incurred afterwards will be paid by the buyer.
From the all the cost listed in the question, the $1,500 for sales staff salaries, $110 for online advertising, and $300 for lawn care are NOT related to the inventory cost because they are administrative and sales expenses.
Therefore, the total inventory cost can be calculated using the following relevant cost:
Acquisition cost = $9,000
Transportation-in by train = $280
Shipping insurance = $135
Used panel restoration = $550
Therefore, we have:
Total inventory cost = Acquisition cost + Transportation-in by train + Shipping insurance + Used panel restoration = $9,000 + $280 + $135 + $550 = $9,965.
