Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Ryan should have been certain that the order terms were
A) F.O.b. origin.
B) F.O.b. factory.
C) C.O.D.
D) 2/10, n/30.
E) F.O.b. destination.

Question

Quizplus · Accepted Answer

F.O.b. destination means that the seller is responsible for the freight charges and the buyer is only responsible once the goods have been delivered to the destination. This means that the price quoted to Ryan should have included the freight charges, and therefore he would not have been charged an additional $25.

Ryan Orders 16 Dozen Fishing Lures from Strike Right for $375