A Company Purchased Inventory for $71,000 from a Vendor on Account,FOB

question 73

Multiple Choice

A company purchased inventory for $71,000 from a vendor on account,FOB shipping point,with terms of 3/10,n/30.The company paid the shipper $1,700 cash for freight in.The company paid the vendor nine days after the invoice date.If there was no beginning inventory,the cost of inventory would be ________.(Assume a perpetual inventory system.)

• A) $70,570
• B) $72,700
• C) $67,170
• D) $69,300

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Definitions:

Total Utility

The total satisfaction or benefit received by consuming a particular quantity of a good or service.

Demand Curve

A visual depiction showing how the demand for a product or service varies with changes in its price over a specific time frame.

Consumer Surplus

The gap between the total sum consumers are ready and able to spend on a good or service versus the total sum they actually spend.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service relative to its market price, representing the economic benefit to consumers.