Which of the following should be included in the cost of the inventory?
A)Salaries paid to warehouse employees.
B)The construction cost of shelves used to store inventory.
C)Shipping and handling on inventory purchases.
D)Advertising of inventory for sale.

Question

Quizplus · Accepted Answer

Shipping and handling costs on inventory purchases should be included in the cost of inventory because these costs are necessary to get the inventory to the business's location and ready for sale. Salaries paid to warehouse employees (A) and the construction cost of shelves (B) should be considered as operating expenses of the warehouse, rather than the cost of the inventory. Advertising of inventory for sale (D) should also be considered as a separate expense, rather than part of the inventory cost.

Which of the Following Should Be Included in the Cost