Gem Company measured inventory at the lower of cost and net realizable value. Data regarding the items in the inventory are: Markers Pens Highlighters Historical cost Selling price Estimated cost to complete Replacement cost Normal profit margin as a percentage of selling price 240,000 360,000 48,000 208,000 188,000 250,000 50,000 168,000 300,000 360,000 68,000 318,000 25% 25% 10% What is the measurement of the inventory? a. 720,000 b. 728,000 c. 676,000 d. 694,000

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.