Question:28 Given the historical cost of the product, Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, the replacement cost for product Dominoe is $60, and the normal profit margin is 20% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method? a. $65. b. $56. c. $60. d. $74.

Question:28 Given the historical cost of the product, Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, the replacement cost for product Dominoe is $60, and the normal profit margin is 20% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method? a. $65. b. $56. c. $60. d. $74.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 1MC: Sienna Company uses the FIFO cost flow assumption. Sierra has inventory with a selling price of 100,...

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Question:28 Given the historical cost of the product, Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, the replacement cost for product Dominoe is $60, and the normal profit margin is 20% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method? a. $65. b. $56. c. $60. d. $74.
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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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Problem 8. * Alfred Company measured inventory at the lower of cost and net realizable value. BTS TWICE 240,000 188,000 360,000 250,000 48,000 50,000 208,000 168,000 25% 25% Historical cost Selling Price Est. cost to complete Replacement cost Profit margin What is the measurement of the inventory? Your answer EXO 300,000 360,000 68,000 318,000 10%
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4 Lynn Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows: Product Product 2 Historical cost Replacement cost Estimated cost to dispose/complete Estimated selling price $30 27 13 60 $15 35 In pricing its ending inventory using the lower of cost or market, what unit values should Lynn use for products #1 and #2, respectively? a. $15.00 and $29.00 b. $19.50 and $29.00 c. $19.50 and $30.00 d. $18.00 and $27.00
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A manufacturer has the following per-unit costs and values for its sole product: Cost $10.00 5.50 Current replacement cost Net realizable value 6.00 Net realizable value less normal profit 5.20 margin Under the first-in first-out (FIFO) cost method, what is the per-unit carrying value of inventory in the manufacturer's statement of financial position? O 55.20 $5.50 $6.00 $10.00
QUESTION 15 During a period when inventory costs are steadily increasing, which of the following is true? O a. Net income will be higher under LIFO than under FIFO. O b. Cost of goods sold will be lower under LIFO than under FIFO. O c. Ending inventory value will be higher under LIFO than under FIFO. O d. Income taxes will be lower under LIFO than under FIFO.