A Company Sells a Product FOB Destination

question 12

Multiple Choice

A company sells a product FOB destination. The product is shipped on December 29, 2015 and the customer receives the shipment on January 3, 2016. Which of the following is true?

• A)The sale will be recorded when the customer's credit card information is received.
• B)The sale will be recorded when the shipment is received by the customer.
• C)The sale will be recorded when the shipment is shipped.
• D)The sale will be recorded when it is known there will be no returns or allowances.

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Definitions:

Additional Minute

An extra unit of time added to a process or activity beyond the original plan.

Existing Capacity

The current maximum level of output that a company can achieve with its available resources, such as facilities, equipment, and workforce.

Variable Selling Expense

Costs incurred from selling a product that vary directly with the number of units sold, such as commissions and shipping costs.

Specialized Machine

Equipment designed for a specific manufacturing process or product, often custom-made and representing a significant fixed cost.