Cullumber Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 25% on selling price is considered normal for each product. Specific data with respect to each product follows: Product #1Product #2Historical cost$18$35Replacement cost1220Estimated cost to dispose1517Estimated selling price3656In pricing its ending inventory using the lower-of-cost-or-market, what unit values, rounded to the nearest dollar, should Cullumber use for products #1 and #2, respectively?

The ending inventory is the inventory left in the stock at end.

Answered: Cullumber Corporation has two products…

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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Cullumber Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 25% on selling price is considered normal for each product. Specific data with respect to each product follows:

	Product #1	Product #2
Historical cost	$18	$35
Replacement cost	12	20
Estimated cost to dispose	15	17
Estimated selling price	36	56

In pricing its ending inventory using the lower-of-cost-or-market, what unit values, rounded to the nearest dollar, should Cullumber use for products #1 and #2, respectively?

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