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

Question
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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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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