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30 March, 14:06

You company needs to ship large piece of construction equipment which costs about $500,000 to a customer across the country. shipping by rail costs $3,000 and will take 8 days. your company uses 20 % to determine the annual inventory carrying cost. what are the approximate total costs of shipping and in-transit inventory? question 1 options:

a.$3,000.

b.$2,192.

c.$10,000.

d.$5,192.

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Answers (1)
  1. 30 March, 16:37
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    The total costs of shipping and in-transit inventory are of $5,192. The right answer is d

    Explanation:

    In order to calculate the approximate total costs of shipping and in-transit inventory we would have to use the following formula:

    Total cost=shipping cost+in-transit inventory cost

    in transit invenory cost=20%*$500,000 * (8/365)

    in transit invenory cost=$2,191.78

    Therefore, Total cost=$3,000+$2,191.78

    Total cost=$5,192

    The total costs of shipping and in-transit inventory are of $5,192
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