When Stated for Shipping FOB Factory/freight Prepaid

question 121

Multiple Choice

When stated for shipping FOB factory/freight prepaid. What does this stand for?

• A)The factory owns the shipment and pays the expense until received by consumer.
• B)The buyer owns the items in transit and the freight has been paid in advance or by shipper.
• C)The shipment is owned by the factory and the buyer paid for the shipping in advance.
• D)The buyer pays for the shipping and owns the merchandise.

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Definitions:

Machining Department

A specific department within a manufacturing facility where machining processes such as cutting, drilling, or milling are performed on materials.

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific activities, enhancing the accuracy of product costing.

Overhead Pools

Aggregations of indirect costs or overheads that are then allocated to products or services based on predetermined criteria.

Cost of Activities

The expenses associated with specific actions or operations within a company.