ABC Co. has the following items in inventory:i) Goods purchased for resale at a cost of $40,000. The recent downturn in the economy hasmeant that these goods will now sell for $42,000 with costs to sell of $2,500.ii)Materials purchased at a cost of $30,000 per tonne which will be sold at a profit. Themanufacturer of the materials has just announced that from now on they will sell these materialsto you at a lower price of $28,000 per tonne.iii)Plant constructed for a specific customer at a cost of $50,000 and an agreed price to thecustomer of $60,000. New health and safety requirements mean that the plant will need to bemodified at a cost to ABC Co. of $4,000 before it can be delivered to the customer.At what value should each of the above be included in the inventory of ABC Co?

Valuation of inventory is atmost important as it affects the…

Answered: ds purchased for sp= that these goods

Business

Accounting

ds purchased for sp= that these goods

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 2MC: Denali Company manufactures household products such as windows, light fixtures, ladders, and work...

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