Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the buyer are termed as transportation cost and are differentiated on the basis of terms of the payment of transportation charges or freight by the buyer or the seller. FOB (Free on Board) Shipping point means that the buyer pays all costs incurred for the delivery of goods once the goods is left from the supplier’s warehouse. To Describe: Who pay the freight charges at the time of (a) FOB shipping point.

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Chapter 5, Problem 7DQ

(a)

To determine

Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the buyer are termed as transportation cost and are differentiated on the basis of terms of the payment of transportation charges or freight by the buyer or the seller.

FOB (Free on Board) Shipping point means that the buyer pays all costs incurred for the delivery of goods once the goods is left from the supplier’s warehouse.

To Describe: Who pay the freight charges at the time of (a) FOB shipping point.

(b)

To determine

Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the buyer are termed as transportation cost and are differentiated on the basis of terms of the payment of transportation charges or freight by the buyer or the seller.

FOB (Free on Board) Destination means that the buyer pays all costs incurred for the delivery of goods once the goods is delivered at buyer receiving point.

To Describe: Who pay the freight charges at the time of (b) FOB destination

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