A company incurred the following costs for a new delivery truck: Purchase price $130,000 Sales...

Question:

A company incurred the following costs for a new delivery truck:

Purchase price$130,000
Sales tax$7,300
Delivery charge from seller's location$1,500
Special racks for storage$3,000
Normal repairs to the truck before it was used for the first time$1,100
Signs painted on the truck$2,000
Insurance on the truck before it was used for the first time$3,000

What is the cost of the delivery truck?

A. $143,800

B. $140,800

C. $138,800

D. $147,900

Sales tax:

The tax which is imposed by the government authorities on the sale of any goods and services is known as the sales tax. It is a consumption tax. Generally, the sales tax is levied at the point of the sale which is collected by the retailer.

Answer and Explanation: 1

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The correct answer is option D which is $147,900

Computation of cost of the delivery truck

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Cost Accounting System: Definition & Function

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Chapter 3 / Lesson 2
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Explore cost accounting systems. Learn the definition of a cost accounting system and understand its different types. See cost accounting system examples.


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