Walberg Associates, antique dealers, purchased goods for $39,300. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $2,100. Walberg Associates insured the shipment at a cost of $330. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $670. Determine the cost of inventory.

$42,400

Explanation:

Given the following ;

Cost of goods purchased= $39,300

Transport cost to warehouse = $2,100

Shipment Insurance = $330

Cleaning and refurbishment cost =$670

Cost of an inventory refers to the subtotal amount spent in getting the goods the point or location where the goods are being put up for sale.

The FOB shipping point means Free On-board Shipping, that is the cost of moving the goods to a central point, usually a designated spot within the country or state of the buyer is covered or bearded by the seller.

Therefore, cost of inventory =

Cost of goods + transport cost to warehouse + shipment insurance + cleaning and refurbishment cost =

$39,300 + $2,100 + $330 + $670 = $42,400

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