The lower-of-cost-or-market rule can be applied to which of the following?

Q: how does the contribution margin pricing method differ from ratio pricing method?

A: The question is based on the concept of pricing policy and methods. The product's price can be…

Q: Which of the following costs is NOT RELEVANT?

A: It is pertinent to note that managerial accounting mainly concentrates on decision making  Inorder…

Q: Describe and apply the lower-of-cost-or-net realizable value rule.

A:

Q: Define the following concepts: a)Prime cost    b) Non production cost

A: All costs incurred are categorised into production and non production cost on the basis of the…

Q: Explain the difference between price-takers and price-setters.

A: When a company cannot dictate prices then it is known as price taker. On the contrary, when a…

Q: What is lower of cost/market, and why is it used? Provide an example.

A: Inventory is a term which depicts the amount of finished goods prevailing in the business. The…

Q: What is Principle of Unequal Cost and who advocated the principle?

A: The basic principle of unequal cost can be described simply as "buying cheap and selling dear". In…

Q: Why is there a need to separate mixed cost as to variable & fixed cost?

A: Variable cost: these are the costs which vary with the units produced. These costs increase by…

Q: Costs that will differ between alternatives and influence the outcome of a decision are

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: How can the WACC be both an average cost and a marginal cost?

A: Weighted average cost of capital is the aggregated cost of capital with respect to the weights or…

Q: Explain the difference between market-based transfer prices and cost-based transfer prices.

A: Market based Transfer Price and Cost Based Transfer Price: Transfer pricing refers to the rules and…

Q: Understand and apply the lower-of-cost-or-net realizable value rule.

A:

Q: What Is the Benefit-Cost Ratio Calculation?

A: Benefit-cost ratio: It can be defined as a financial ratio that shows a relationship between the…

Q: lower-of-cost-or-market approach,

A: It is pertinent to note that inventory need to be valued at cost of net realizable value whichever…

Q: What is the relevant range? How does fixed costs and variable costs behave outside the relevant…

A: Relevant range refers to the level of the activity which represents the maximum and minimum limits…

Q: What are the various levels of aggregation to which the lower of cost and net realizable value rule…

A: LCNRV (Lower of Cost or Net Realizable Value) approach: It is an approach that compares the cost of…

Q: What does the lower-of-cost-or-market (LCM) rule require?

A: Lower-of-cost-or-market: The lower-of-cost-or-market (LCM) is a method which requires the reporting…

Q: According to our authors, explain the concept of “lower-of-cost-or-market.”

A: When a company prepares its financial statement, it reports certain items in the financial statement…

Q: What is the primary disadvantage of basing the costplus pricing formula on absorption cost?

A: Definition: Cost plus-pricing approach: The pricing approach used by the companies to set the target…

Q: which of the following could affect the price

A: Stocks are prone to systematic and unsystematic risks. Factors or risk that affect the entire…

Q: Describe and apply the lower-of-cost-or-market rule.

A: Cost:   It is the economic value incurred by an organization to produce a product or render a…

Q: What are the advantages and disadvantages of target pricing versus cost-based pricing?

A: Advantages of target pricing are as follows: It help in controlling in cost It provide profit with…

Q: What are the three primary cost flow assumptions? How does the specific identification method differ…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: Understand and apply the lower-of-cost-or-market rule.

A: Cost: It is the economic value incurred by an organization to produce a product or render a service.

Q: What are the advantages and disadvantages of ABC relative to the step-down method of cost…

A: ABC means Activity Based Costing. Costs will be allocated based on the activities the organization…

Q: be considered

A: The phrase "mixed costs" in accounting refers to costs and expenses that include two components:…

Q: Which of the following costs can be ignored when making a decision? a. Opportunity costs. b.…

A: Sunk cost can be ignored when making a decision. It is irrelevant cost for decision making.  Sunk…

Q: example of lower of cost or net realizable value and explain

A: The concept of lower of cost or net realizable value says that the amount of inventory should be…

Q: Which of the following is NOT considered in cost-volume-profit analysis?

A: Answer: opportunity costs.

Q: “Variable costs and differential costs mean the same thing.” Do you agree? Explain

A: Differential cost:   The difference between the costs of two alternatives is considered as a…

Q: What is a mixed cost? Give an example.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: When is it more appropriate to use market-based transfer price rather than cost-based transfer…

A: Transfer pricing:- Its the price at which one unit of a company sells goods to its another unit.…

Q: What two arguments tend to justify classifying all costs as either fixed or variable even though…

A: Costs are the expenses which are spent by the manufacturing entity to perform its operations or…

Q: lower-of-cost-or-market

A: Under lower of cost or market value rule, inventory is valued at cost or market value whichever is…

Q: Explain the following assertion: “Price setting generally requires a balance between market forces…

A: Businesses have to make a lot of decisions in running a business one of which is price setting. They…

Q: Which of the following is the best definition of a variable cost?

A: Types of Costs 1. Variable Cost: The cost which changes with the change in the level of activity is…

Q: Which one of the following may not be considered a cost driver?

A: Under activity based costing, activities and cost allocation basis (cost drivers) are used to…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.