The inventory of Royal Decking consisted of five products. Information about the

Question

The inventory of Royal Decking consisted of five products. Information about the December 31, 2016, inventory is as follows Per Unit Selling Price Product Cost A $50 $70 100 50 50 10 110 90 80 20 Costs to sell consist only of a sales commission equal to 20% of selling price and shipping costs equal to 10% of cost. Requirec What unit value should Royal Decking use for each of its products when applying the lower of cost and net realizable value rule to units of inventory? Per Unit Inventory Value NRV ProductCost $ 20

Explanation / Answer

NRV = Selling price - Costs to sell

Per Unit Inventory Value = Lower of Cost or NRV.

Product Cost NRV Per Unit Inventory Value A 50 51 {70-[(70*20%)+(50*10%)]} 50 B 100 78 {110-[(110*20%)+(100*10%)]} 78 C 50 67 {90-[(90*20%)+(50*10%)]} 50 D 50 59 {80-[(80*20%)+(50*10%)]} 50 E 10 15 {20-[(20*20%)+(10*10%)]} 10

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.