On May 3, 2014, Eisler Company consigned 104 freezers, costing $670 each, to Remmers Company. The cost of shipping the freezers amounted to $870 and was paid by Eisler Company. On December 30, 2014, a report was received from the consignee, indicating that 52 freezers had been sold for $940 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of $260, and total installation costs of $330 on the freezers sold. Compute the profit for the consignor for the units sold.
Inventory are those goods which are at different stages of being made for selling purposes. For example Finished goods, Work-in-progress, Raw materials, etc.
Answer and Explanation:
Inventory ( units) unsold = Total units - Units sold
= 104 -52
Cost of inventory/ per unit = Cost + freight charges
= $670 +$870/104 = 678.37
Total Value of inventory unsold = Number of units unsold * Cost per unit
= 52 * 678.37
Sales commission, advertisement, and installation charges are administrative expenses and do not form part of inventory cost
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from Business 112: Operations ManagementChapter 13 / Lesson 7