An Invoice Dated March 15 for $400 with Terms 2/10

question 220

Short Answer

An invoice dated March 15 for $400 with terms 2/10, 1/20, EOM, was received on March 20. By what date should the invoice be paid to qualify for the 2% discount?

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Definitions:

Manufacturing Costs Assigned

The allocation of manufacturing costs to individual products or job orders based on direct materials, direct labor, and applied overhead.

Job Cost Sheets

Documents used to record and track the materials, labor, and overhead costs associated with a specific job.

Manufacturing Overhead

This refers to the indirect costs associated with manufacturing, such as utilities, rent, and salaries of supervisory staff, that are not directly traceable to a specific product.

Job Order Cost System

An accounting system used to assign costs to specific jobs or batches, ideal for customized orders.