4Lynn Corporation has two products in its ending inventory, each accounted for atthe lower of cost or market. A profit margin of 30% on selling price is considerednormal for each product. Specific data with respect to each product follows:Product Product 2Historical costReplacement costEstimated cost to dispose/completeEstimated selling price$30271360$1535In pricing its ending inventory using the lower of cost or market, what unit valuesshould Lynn use for products #1 and #2, respectively?a. $15.00 and $29.00b. $19.50 and $29.00c. $19.50 and $30.00d. $18.00 and $27.00

Steps taken for computing the inventory valuation is as above.

Answered: 4 Lynn Corporation has two products in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The VARCOST2 worksheet is capable of calculating variable and absorption income when unit sales are equal to or less than production. An equally common situation (that this worksheet cannot handle) is when beginning inventory is present and sales volume exceeds production volume. Revise the worksheet Data Section to include: Beginning inventory in units 15,000 Beginning inventory cost (absorption) $266,875 Beginning inventory cost (variable) $210,000, Also, change actual production to 70,000. Revise the Answer Section to accommodate this new data. Assume that Anderjak uses the weighted-average costing method for inventory. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Check figure: Absorption income, $670,000.
Information pertaining to the inventory of Palette Company follows. LIFO Selling Replacement Cost Price Cost Category: Supreme Item A $5,600 $6,400 $4,800 Item B 7,200 7,200 7,680 Item C 17,600 17,600 16,800 Category: Classic Item X 28,800 28,800 30,400 Item Y 35,200 42,400 41,600 Item Z 56,000 48,000 52,800 The company has a normal profit margin of 20% of selling price and has no additional costs to complete or sell the items. What is the lower-of-cost-or-market value of the company's inventory applying the rule to (a) each individual item and (b) to each inventory category? Select one: a. Inventory item: $147,200; Inventory Category: $147,200 b. Inventory item: $150,400; Inventory Category: $150,400 c. Inventory item: $143,520; Inventory Category: $150,400 d. Inventory item: $141,120; Inventory Category: $147,520
Jenks Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizabl e-value(LCNRV) basis in valuing inventories: Product Cost NRV A $114,000 $120,000 B 80,000 76,000 C 160,000 162,000 After Jenks applies the LCNRV rule, the value of the inventory reported on the balance sheet would be
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Question - Company sells three different categories of tools (small, medium, and large). The cost and market value of its inventory of tools is as follows. Cost Market Value Small $ 63,200 $ 72,000 Medium 2,89,400 2,60,800 Large 1,52,100 1,72,800 Determine the value of the company's inventory under the lower-of- cost-or-market value approach.
5
Cost Selling price Costs to sell Product 1 2 3 $ Required: What unit values should Han use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to ending inventory? Cost Product 1 $ 20 40 20✔ $ 90 ✓ 50 ✓ 6 NRV Product 2 $ 90 120 40 34✔✔ $ X 60✔ Product 3 $ 50 70 10 Per Unit Inventory Value 20✔ X 50 ✓

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