Which of the following should be included in the inventory cost of an item purchased?
A) Purchase discounts lost
B) Insurance premium on item during transit
C) Costs incurred to build a permanent display cabinet for this, and similar items
D) Costs to train employees on a new computerized inventory control system

Question

Quizplus · Accepted Answer

The insurance premium on the item during transit is a cost directly related to acquiring the item for resale and is therefore part of its inventory cost.

Answer: C
 The costs incurred to build a permanent display cabinet for the item and similar items is a cost directly related to displaying and selling the item and should be included in the inventory cost.

Answer: A and D are incorrect.
 Purchase discounts lost represents a reduction in the cost of goods purchased and is not part of the inventory cost. The costs to train employees on a new computerized inventory control system do not relate directly to the acquisition, production, or sale of the item and should not be included in its inventory cost.

Which of the Following Should Be Included in the Inventory