Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the products are as follows: Cost Replacement cost Selling price Selling costs Normal profit margin Product 1 2 3 Product 1 $ 22 Cost 20 42 Replacement cost 8 7 Required: What unit values should Herman use for each of its products when applying the lower of cost or market (LCM) to ending inventory? Product 2 $ 92 87 NRV 122 44 32 Product 3 $ 52 NRV - NP 42 77 11 14 Market Per Unit Inventory Value

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the products are
as follows:
Cost
Replacement cost
Selling price
Selling costs
Normal profit margin
Product
1
2
3
Product 1
$ 22
Cost
20
42
Replacement
cost
8
7
Required:
What unit values should Herman use for each of its products when applying the lower of cost or market (LCM) to ending inventory?
Product 2
$ 92
87
NRV
122
44
32
Product 3
$ 52
NRV - NP
42
77
11
14
Market
Per Unit
Inventory
Value
Transcribed Image Text:Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the products are as follows: Cost Replacement cost Selling price Selling costs Normal profit margin Product 1 2 3 Product 1 $ 22 Cost 20 42 Replacement cost 8 7 Required: What unit values should Herman use for each of its products when applying the lower of cost or market (LCM) to ending inventory? Product 2 $ 92 87 NRV 122 44 32 Product 3 $ 52 NRV - NP 42 77 11 14 Market Per Unit Inventory Value
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