Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be part of the cost of the candleholder inventory? a. Advertising costs b. Freight in c. Freight out d. Purchasing agent wages

Question

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Answer 1

Textbook Question

Chapter 6, Problem 1QC

Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be part of the cost of the candleholder inventory?

a. Advertising costs

b. Freight in

c. Freight out

d. Purchasing agent wages

Expert Solution & Answer

To determine

Determine from the following which cost is included in the cost of inventory.

Answer to Problem 1QC

Option: (b) Freight in

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.

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03:08

Students have asked these similar questions

Ravenna Candles recently purchased candleholders for resale in its shops. Which of thefollowing costs would be part of the cost of the candleholder inventory?a. Advertising costsb. Freight inc. Freight outd. Purchasing agent wages

A home improvement store, like Lowe’s, carries the following items: Inventory Items Quantity Unit Cost Unit NRV Hammers 100 $6.80 $7.30 Saws 50 9.80 8.80 Screwdrivers 130 1.80 2.40 Drills 40 24.80 21.60 One-gallon paint cans 160 5.30 4.80 Paintbrushes 180 5.80 6.30 Required: 1. Compute the total cost of inventory.2. Determine whether each inventory item would be reported at cost or net realizable value, and then place that unit amount in the “Lower of Cost and NRV per unit” column. Multiply the quantity of each inventory item by the appropriate cost or NRV unit amount and place the total in the “Total” column.3. Record any necessary adjusting entry to write down inventory from cost to net realizable value.4. Determine the financial statement effects of using lower of cost and net realizable value to report inventory.

If the company had purchased all its materials from the online marketplace, describe what inventory cost would be shown for all materials on hand based on the average transaction price. Explain if the inventory cost value is higher or lower than the value of all materials if using their standard price. If the company can freely choose the lower of the standard price or the average price in the online marketplace, explain what the lowest possible inventory cost of all materials on hand is. Identify whether there is a particular marketplace vendor who always sells at a price lower than the standard price cost of all materials on hand.

Answer 2

Textbook Question

Chapter 6, Problem 1QC

Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be part of the cost of the candleholder inventory?

a. Advertising costs

b. Freight in

c. Freight out

d. Purchasing agent wages

Expert Solution & Answer

To determine

Determine from the following which cost is included in the cost of inventory.

Answer to Problem 1QC

Option: (b) Freight in

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.

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03:08

Answer 3

Textbook Question

Chapter 6, Problem 1QC

Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be part of the cost of the candleholder inventory?

a. Advertising costs

b. Freight in

c. Freight out

d. Purchasing agent wages

Expert Solution & Answer

To determine

Determine from the following which cost is included in the cost of inventory.

Answer to Problem 1QC

Option: (b) Freight in

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.

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03:08

Answer 4

Textbook Question

Chapter 6, Problem 1QC

Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be part of the cost of the candleholder inventory?

a. Advertising costs

b. Freight in

c. Freight out

d. Purchasing agent wages

Expert Solution & Answer

To determine

Determine from the following which cost is included in the cost of inventory.

Answer to Problem 1QC

Option: (b) Freight in

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.

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03:08

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Determine from the following which cost is included in the cost of inventory.

Answer to Problem 1QC

Option: (b) Freight in

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.

Answer 8

Expert Solution & Answer

To determine

Determine from the following which cost is included in the cost of inventory.

Answer to Problem 1QC

Option: (b) Freight in

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Determine from the following which cost is included in the cost of inventory.

Answer 12

Answer to Problem 1QC

Option: (b) Freight in

Answer 13

Explanation of Solution

Inventory costs:

Inventory costs are the costs which are related with the obtaining, storage and management of inventory, it includes ordering costs and carrying costs.

(a) Advertising costs are costs which are included in the advertisement expenses.
(b) Freight in is a cost which incurred at the time of purchase of inventory. Hence it is included in the cost of inventory.
(c) Freight out is a cost which incurred at the time of sale of inventory. Hence, it is included in the sales related expenses.
(d) Purchasing agent wages are expenses which are included in the wages and salaries expenses

Hence, option (b) Freight in is the correct answer.