The inventory of Royal Decking consisted of five products. Information about the
ID: 2568384 • Letter: T
Question
The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows Per Unit Product Cost Replacement Cost Selling Price A 48 $ 68 108 $43 48 108 28 78 63 78 36 138 38 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal gross profit percentage is 40% of selling price Required What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? (Do not round intermediate calculations. Round final answers to 2 decimal places.) Per Unit Product Cost Replacement NRV NRV - NP Market Inventory cost Value 43 78 63 108 28 36Explanation / Answer
(a)
(b)
(c)
(d) = (c)*10%
(e) = (b)*5%
(f) = (c) - (d) - (e)
Product
Cost
Selling Price
Sales Commission
Shipping Cost
NRV
A
48
68
6.8
2.4
58.8
B
88
108
10.8
4.4
92.8
C
48
88
8.8
2.4
76.8
D
108
138
13.8
5.4
118.8
E
28
38
3.8
1.4
32.8
Product
Cost
Replacement Cost
NRV
NRV - NP
Market
Per unit Inventory Value
A
48
43
58.8
31.6
43
43
B
88
78
92.8
49.6
78
78
C
48
63
76.8
41.6
63
48
D
108
78
118.8
63.6
78
78
E
28
36
32.8
17.6
32.8
32.8
(a)
(b)
(c)
(d) = (c)*10%
(e) = (b)*5%
(f) = (c) - (d) - (e)
Product
Cost
Selling Price
Sales Commission
Shipping Cost
NRV
A
48
68
6.8
2.4
58.8
B
88
108
10.8
4.4
92.8
C
48
88
8.8
2.4
76.8
D
108
138
13.8
5.4
118.8
E
28
38
3.8
1.4
32.8
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