Tech Wear Inc. has 500 units of inventory on hand. The cost per unit is $45, but the market value has dropped to $40 per unit. Additionally, Tech Wear estimates that $2,000 in additional costs will be incurred to sell the inventory. What is the net realizable value of the inventory?

Tech Wear Inc. has 500 units of inventory on hand. The cost per unit is $45, but the market value has dropped to $40 per unit. Additionally, Tech Wear estimates that $2,000 in additional costs will be incurred to sell the inventory. What is the net realizable value of the inventory?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 3CE: Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods...

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Question

Can you help me solve this general accounting question using valid accounting techniques?

Tech Wear Inc. has 500 units of inventory on hand. The cost per
unit is $45, but the market value has dropped to $40 per unit.
Additionally, Tech Wear estimates that $2,000 in additional costs
will be incurred to sell the inventory. What is the net realizable
value of the inventory?

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