Question

A company purchased $3,900 worth of merchandise. Transportation costs were an additional $340. The company returned $270 worth of merchandise and then paid the invoice within the 3% cash discount period. The total cost of this merchandise is:________

Answer 1

Answer: $3,850.90

Step-by-step explanation:

Answer 2

$3,850.90

Step-by-step explanation:

The total cost of the merchandise is the cost incurred in getting the merchandise to the location where it becomes available for sale or use in the production process.

It includes the cost of the item, the cost of freight less the returns and discounts.

Cost without discount

= $3,900 + $340 - $270

= $3,970

Discounted amount

= 3% of $3,970

= $119.10

Total cost of this merchandise

= $3,970 - $119.10

= $3,850.90