**CD Cost Allocation Using Relative Sales Value Method**Nash, Inc. purchases 1,100 computer game CDs from a distributor who is discontinuing those games. The total purchase price for the lot is $6,000. Nash plans to categorize the CDs into three groups for resale, with each group having a different price per CD.### Grouping and Pricing Details:- **Group 1:** - **Number of CDs**: 300 - **Price per CD**: $5- **Group 2:** - **Number of CDs**: 700 - **Price per CD**: $10- **Group 3:** - **Number of CDs**: 100 - **Price per CD**: $15### Task:Determine the cost per CD for each group using the relative sales value method. Final answers should be rounded to two decimal places (e.g., 5.85).### Cost per CD Calculation:| Group | Cost per CD ||-------|-------------|| 1 | $ || 2 | $ || 3 | $ |This exercise involves calculating the individual cost allocation based on the relative sales value for each CD group, without rounding ratios during computation to ensure accuracy.

Cost per CD in each group in given below:

Nash, Inc. buys 1,100 computer game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $6,000. Nash will group the CDs into three price categories for resale, as indicated below. Group No. of CDs Price per CD 1 300 $5 700 10 3 100 15 Determine the cost per CD for each group, using the relative sales value method. (Do not round ratios for computational purposes. Round final answers to 2 decimal places, eg. 5.85.) Group Cost per CD 1 %$4 24 24

Nash, Inc. buys 1,100 computer game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $6,000. Nash will group the CDs into three price categories for resale, as indicated below. Group No. of CDs Price per CD 1 300 $5 700 10 3 100 15 Determine the cost per CD for each group, using the relative sales value method. (Do not round ratios for computational purposes. Round final answers to 2 decimal places, eg. 5.85.) Group Cost per CD 1 %$4 24 24

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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