
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Transcribed Image Text:Marr Corporation has two products in its ending inventory, each accounted for at
the lower of cost or market. A profit margin of 30% on selling price is considered
normal for each product. Specific data with respect to each product follows:
Product Product 2
Historical cost
Replacement cost
Estimated cost to complete/dispose
Estimated selling price
$40
45
10
80
$70
54
26
130
In pricing its ending inventory using the lower-of-cost-or-market, what unit
values should Marr use for products #1 and #2, respectively?
a. $40.00 and $60.00
b. $46.00 and $65.00
c. $40.00 and $65.00
d. $45.00 and $54.00
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