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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![**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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5e3cc97e-a77f-4ac5-9e71-fb8b01208b37%2F9e9a4b86-4cf3-4b08-936f-9fa1d32e5411%2F7yt53n6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**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.
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