Inventory Shipped FOB Destination and in Transit on the Last

question 18

Multiple Choice

Inventory shipped FOB destination and in transit on the last day of the year should be included in:

• A)the inventory balance of the seller.
• B)the inventory balance of the buyer.
• C)neither the inventory balance of the buyer or the seller.
• D)both the inventory balance of the buyer and the seller.

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Definitions:

Material Variance

The difference between the actual cost of materials used in production and the standard cost expected.

Favourable Variances

Differences between actual and budgeted performance that result in better than expected financial outcomes.

Raw Material

The basic materials from which products are manufactured or made.

Desired Outcome

The specific result or objective that an individual or organization aims to achieve through a set of actions or strategies.