When determining the unit cost of an inventory item, which of the following should not be included?
A) Interest on loans obtained to purchase the item
B) Commissions paid when purchased
C) Freight costs on the item when purchased
D) Storage fees prior to sale

Question

Quizplus · Accepted Answer

Interest on loans obtained to purchase the item is not directly related to the cost of the inventory item itself and should not be included when determining its unit cost. The other options, such as commissions paid, freight costs, and storage fees, are directly related to the purchase and storage of the item and should be included in its unit cost.

When Determining the Unit Cost of an Inventory Item, Which