A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers.Its product costs were $2,550.

Question

Quizplus · Accepted Answer

Product costs include the cost of purchasing inventory and any costs necessary to bring the inventory to a saleable condition, such as delivery to the business, not to customers. The $50 delivery cost to customers is a selling expense, not a product cost.

A Merchandising Business Paid $2,500 to Purchase Inventory and $50