Which of the following statements is true of shipping costs?
A) FOB installed indicates that the title and responsibility are transferred before the equipment is installed and used for operation.
B) FOB origin is also referred to as FOB installed.
C) The terms and conditions of a sale exclude shipping costs involved in transporting the goods.
D) Shipping costs are solely borne by the seller.
E) FOB destination means the buyer will take responsibility for the goods once they reach the buyer's location, and the seller will pay the freight.

Question

Quizplus · Accepted Answer

FOB destination means that the seller is responsible for shipping the goods and paying the freight until the goods reach the buyer's location. Once the goods reach the buyer's location, the buyer takes responsibility for the goods. Therefore, shipping costs are not solely borne by the seller, and FOB origin is not the same as FOB installed. FOB installed indicates that the title and responsibility are transferred before the equipment is installed and used for operation, not necessarily involving shipping costs. The terms and conditions of a sale may or may not exclude shipping costs, depending on the agreement between the parties.

Which of the Following Statements Is True of Shipping Costs