Question

In: Accounting

Blue Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....

Blue Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

Item No.

Quantity

Cost per Unit

Cost to Replace

Estimated Selling Price

Cost of Completion and Disposal

Normal Profit
1320 1,300 $3.23 $3.03 $4.55 $0.35 $1.26
1333 1,000 2.73 2.32 3.54 0.51 0.51
1426 900 4.55 3.74 5.05 0.40 1.01
1437 1,100 3.64 3.13 3.23 0.25 0.91
1510 800 2.27 2.02 3.28 0.81 0.61
1522 600 3.03 2.73 3.84 0.40 0.51
1573 3,100 1.82 1.62 2.53 0.76 0.51
1626 1,100 4.75 5.25 6.06 0.51 1.01


From the information above, determine the amount of Blue Company inventory.

The amount of Blue Company’s inventory $

Solutions

Expert Solution

Item No.

Original Cost

Replacement Cost

Estimated Disposal Cost

Expected selling Price

Normal Profit on sales

1320

3.23

3.03

0.35

4.55

1.26

1333

2.73

2.32

0.51

3.54

0.51

1426

4.55

3.74

0.4

5.05

1.01

1437

3.64

3.13

0.25

3.23

0.91

1510

2.27

2.02

0.81

3.28

0.61

1522

3.03

2.73

0.4

3.84

0.51

1573

1.82

1.62

0.76

2.53

0.51

1626

4.75

5.25

0.51

6.06

1.01

A

B

C

D

E

F

G

Product

Current Replacement Cost

Net relisable Value(Expected selling price-Estimated disposal cost)

Net realisable value-Normal Profit on sales

Designated market value(Middle value among A/B/C)

Original Cost

Lower of cost or market value(i.e. lower of D or E)

No. of units

F*G

1320

3.03

4.2

2.94

3.03

3.23

3.03

1300

3939

1333

2.32

3.03

2.52

2.52

2.73

2.52

1000

2520

1426

3.74

4.65

3.64

3.74

4.55

3.74

900

3366

1437

3.13

2.98

2.07

2.98

3.64

2.98

1100

3278

1510

2.02

2.47

1.86

2.02

2.27

2.02

800

1616

1522

2.73

3.44

2.93

2.93

3.03

2.93

600

1758

1573

1.62

1.77

1.26

1.62

1.82

1.62

3100

5022

1626

5.25

5.55

4.54

5.25

4.75

4.75

1100

5225

Total

$26,724

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ekkarill92 answered 1 year ago
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