A Company Buys Large Recreational Vehicles ("RVS") and Sells Them

question 135

Multiple Choice

A company buys large recreational vehicles ("RVS") and sells them on credit.The company uses a perpetual inventory system and always pays for purchases within the discount period by borrowing.Information about the latest purchase of an RV is: $\begin{array} { l } \text {Purchase price. }&\$60,000\\ \text { Delivery charges.}&2,500\\ \text {Terms, on credit, \( 5 / 30, \mathrm{n} / 90 \) Insurance premium paid. }&3,000\\ \text {Cleaning and making ready for sale. }&250\\ \text {Interest on purchase loan. }&7,200\\ \text {Cost of permanent shed built to display the RV pending sale. }&3,750\\\end{array}$
The cost that should be assigned to the RV for inventory purposes is:

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Definitions:

High-Income Economies

Countries or regions characterized by a high gross domestic product (GDP) per capita, indicating a higher standard of living and economic development.

Inefficient Use

Inefficient use describes a scenario in which resources, such as time, money, or materials, are not utilized in a way that maximizes productivity or value.

Labor

Labor refers to the human effort, both physical and mental, used in the production of goods and services.

Underemployment

A labor condition where individuals are working less than they would like to or are in positions that underutilize their skills, education, or experience.