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The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Product Cost Cost Selling Price A $ 40 $ 35 $ 60 B 80 70 100 C 40 55 80 D 100 E 20 70 28 130 30 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal profit is 30% of selling price. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Product Cost Replacement cost A $ 40 $ 35 B 80 70 C 40 55 D 100 70 E 20 28 NRV NRV minus NP Market Per Unit Inventory Value

The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Product Cost Cost Selling Price A $ 40 $ 35 $ 60 B 80 70 100 C 40 55 80 D 100 E 20 70 28 130 30 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal profit is 30% of selling price. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Product Cost Replacement cost A $ 40 $ 35 B 80 70 C 40 55 D 100 70 E 20 28 NRV NRV minus NP Market Per Unit Inventory Value

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 2RE: Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net...
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The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Product Cost Cost Selling Price A $ 40 $ 35 $ 60 B 80 70 100 C 40 55 80 D 100 E 20 70 28 130 30 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal profit is 30% of selling price. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Product Cost Replacement cost A $ 40 $ 35 B 80 70 C 40 55 DE 100 70 20 28 NRV NRV minus NP Market Per Unit Inventory Value
Transcribed Image Text:The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Product Cost Cost Selling Price A $ 40 $ 35 $ 60 B 80 70 100 C 40 55 80 D 100 E 20 70 28 130 30 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal profit is 30% of selling price. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Product Cost Replacement cost A $ 40 $ 35 B 80 70 C 40 55 DE 100 70 20 28 NRV NRV minus NP Market Per Unit Inventory Value
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