This post is currently awaiting moderation.
Question
In: Accounting
Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $20
Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $20; replacement cost, $18; selling price, $30; selling costs, $4. The normal profit is 30% of selling price. What unit value should Ross use when applying the lower of cost or market (LCM) rule to ending inventory?
Solutions
Expert Solution
Determine market value as follows:
Market value is the middle value of Replacement cost, NRV (or Ceiling), and NRV – NP (or Floor).
• Replacement cost is $18 per unit.
• Calculate NRV (or Ceiling) per unit as follows:
NRV(or Ceiling) = Selling price – Selling cost
= $30 - $4
= $26
Therefore, NRV (or Ceiling) is $26 per unit.
• Calculate NRV-NP (or Floor) as follows:
NRV-NP (or Floor) = NRV – (30% of Selling price)
= $26 – (30% × $30)
= $17
Therefore, NRV-NP (or Floor) is $17 per unit.
Therefore, market value equals $18 i.e., middle value of ($18, $26, and $17).
Cost per unit is $20.
Market value per unit is $18.
Therefore, R should use $18 as unit value i.e., Lower of $20 (cost) or $18 (market) when applying the lower of cost or market (LCM) rule to ending inventory.
Therefore, R should use $18 as unit value i.e., Lower of $20 (cost) or $18 (market) when applying the lower of cost or market (LCM) rule to ending inventory.
Junaid answered 2 years agoRelated Solutions
Ross Electronics has one product in its ending inventory. Per unit data consist of the following:...
Ross Electronics has one product in its ending inventory. Per
unit data consist of the following: cost, $25; replacement cost,
$23; selling price, $35; selling costs, $8. The normal profit is
30% of selling price.
What unit value should Ross use when applying the lower of cost or
market (LCM) rule to ending inventory?
Football teams ending inventory includes the following items product units cost per unit market per unit...
Football teams ending inventory includes the following items
product
units
cost per unit
market per unit
caps
200
$15
$22
travel Jerseys
55
$40
$125
windbreakers
18
$60
$85
signature stadium cushions
500
$20
$10
Compute the lower of cost or market for the ending inventory
separately for each product.
per unit
per unit
total inventory
total inventory
inventory items
units
cost
market
cost
market
LCM Applied to individual items
caps
travel jerseys
windbreakers
signature stadium cushion
Lower-of-Cost-or-Market Inventory On the basis of the following data: Product Inventory Quantity Cost per Unit Market...
Lower-of-Cost-or-Market Inventory
On the basis of the following data:
Product
Inventory
Quantity
Cost per
Unit
Market Value per Unit
(Net Realizable Value)
Model A
13
$198
$223
Model B
42
63
56
Model C
36
126
144
Model D
13
241
237
Model E
33
144
152
Determine the value of the inventory at the lower of cost or
market. Assemble the data in the form illustrated in Exhibit 9.
Inventory at the Lower of Cost or Market
Product
Total...
Lower-of-Cost-or-Market Inventory On the basis of the following data: Product Inventory Quantity Cost per Unit Market...
Lower-of-Cost-or-Market Inventory
On the basis of the following data:
Product
Inventory
Quantity
Cost per
Unit
Market Value per Unit
(Net Realizable Value)
Model A
12
$106
$102
Model B
45
84
70
Model C
36
254
243
Model D
31
85
88
Model E
41
132
148
Determine the value of the inventory at the lower of cost or
market. Assemble the data in the form illustrated in Exhibit 9.
Inventory at
the Lower of Cost or Market
Product
Total...
Herman Company has three products in its ending inventory. Specific per unit data at the end...
Herman Company has three products in its ending inventory.
Specific per unit data at the end of the year for each of the
products are as follows:
Product 1
Product 2
Product 3
Cost
$
26
$
96
$
56
Replacement
cost
24
91
46
Selling
price
46
126
63
Selling
costs
8
31
14
Normal profit
margin
11
36
18
Required:
What unit values should Herman use for each of its products when
applying the lower of cost or...
Herman Company has three products in its ending inventory. Specific per unit data at the end...
Herman Company has three products in its ending inventory.
Specific per unit data at the end of the year for each of the
products are as follows:
Product 1
Product 2
Product 3
Cost
$
39
$
109
$
69
Selling price
97
177
127
Costs to sell
5
78
29
Required:
What unit values should Herman use for each of its products when
applying the lower of cost or net realizable value (LCNRV) rule to
ending inventory?
Product
Cost...
decor Ltd has the following figures regarding its inventory. cost price per unit $50 per unit...
decor Ltd has the following figures regarding its inventory.
cost price per unit $50 per unit , . storage cost per unit $5 per
unit, annual usage 100 000 units, normal delivery
time $2.5 weeks, insurance cost per unit $5 per unit, interest rate
is 9%, ordering cost per unit $80, safety stock 5000 unit. There
are 50 normal working weeks per year and four weeks per month.
REQUIRED: 1. calculate the economic order quantity(EOQ). 2.
calculate the number of...
The following data refer to Bear Company's ending inventory: Item code Quantity Unit Cost Unit Market...
The following data refer to Bear Company's ending inventory:
Item code
Quantity
Unit Cost
Unit Market
Small
100
$228
$232
Medium
420
152
176
Large
600
168
176
Extra-Large
220
268
256
How much is the inventory if the lower of cost or market rule is
applied to each item of inventory?
Select one:
A. $252,640
B. $243,760
C. $265,440
D. None of the above
Using the specific identification method: Date Units purchased Cost per unit Ending inventory March 1 20...
Using the specific identification method:
Date
Units
purchased
Cost per unit
Ending
inventory
March 1
20 Xbox?s
360
$
275
5
Xbox?s from March
April 1
41 Xbox?s
360
250
11 Xbox?s from
April
May 1
70 Xbox?s
360
240
8 Xbox?s from
May
a. Calculate the ending inventory.
Ending inventory
$
b. Calculate the cost of goods sold.
Cost of goods sold
$
Product A sells for $24.00 per unit and its variable cost is $20.00 per unit. Product...
Product A sells for $24.00 per unit and its variable cost is
$20.00 per unit. Product B sells for $30.00 per unit and its
variable cost is $22.80 per unit. Both products use the same
machines. A total of 204,000 machine hours are available each year.
Product A requires 1.0 machine hour (MH) while Product B requires
1.5 MHs. The market demand for Product A is 100,000 units and the
market demand for Product B is 70,000 units. The company...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You are writing a billing program that adds up the items a user enters. Your program...
- Theoretically, once a trader enters into a forward rate agreement (FRA), the interest locked at the...
- Create a driver class to do the following: a. Read data from the given file BankData.data...
- In well-governed companies, a sense of accountability and ethical leadership create a culture that places organizational...
- Could someone please tell me what corrections I should make to this code. (Python) Here are...
- The original Occupational and Safety Health Act was passed to correct the large n umber of...
- West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The...
ADVERTISEMENT