Exercise 9-4 Lower of cost or market [LO9-1] Herman Company has three products i

Question

Exercise 9-4 Lower of cost or market [LO9-1] 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: Product1 S 23 Product 2 $ 93 Product 3 53 Cost Replacement cost Selling price Selling costs Normal profit margin 34 Required What unit values should Herman use for each of its products when applying the lower of cost or market (LCM) to ending inventory? Per Unit Replacement cost Product Cost NRV NRV - NP Market Inventory Value 2 3

Explanation / Answer

Product Cost Replacement cost NRV NRV-NP Market Per unit inventory value 1 23 21 37 29 29 23 2 93 88 89 56 88 88 3 53 43 58 43 43 43

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