Novak Company uses the LCNRV method, on an individual-item basis, in pricing its
ID: 2544834 • Letter: N
Question
Novak Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.
Item D
Item E
Item F
Item G
Item H
Item I
Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.
Item D
Item E
Item F
Item G
Item H
Item I
Estimated selling price $136 $124 $107 $102 $124 $102 Cost 85 90 90 90 57 41 Cost to complete 34 34 28 40 34 34 Selling costs 11 20 11 23 11 23Explanation / Answer
Item D Item E Item F Item G Item H Item I Estimated selling price A 136 124 107 102 124 102 Cost B 85 90 90 90 57 41 Cost to complete C 34 34 28 40 34 34 Selling costs D 11 20 11 23 11 23 Cost B+C 119 124 118 130 91 75 NRV A-D 125 104 96 79 113 79 Lower of cost or NRV 119 104 96 79 91 75
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