The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Selling Price Cost Product Cost ABCDE $ 45 $ 40 85 45 442623 $ 65 75 105 60 85 75 33 135 35 105 25 Selling costs consist of a sales commission equal to 15% of selling price and shipping costs equal to 5% of cost. The normal profit is 25% of selling price. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Note: Do not round intermediate calculations. Round final answers to 2 decimal places. Product Cost Replacement cost ABCDE $ 45 $ 40 85 75 45 60 105 75 25 33 NRV NRV minus NP Market Per Unit Inventory Value
The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Selling Price Cost Product Cost ABCDE $ 45 $ 40 85 45 442623 $ 65 75 105 60 85 75 33 135 35 105 25 Selling costs consist of a sales commission equal to 15% of selling price and shipping costs equal to 5% of cost. The normal profit is 25% of selling price. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Note: Do not round intermediate calculations. Round final answers to 2 decimal places. Product Cost Replacement cost ABCDE $ 45 $ 40 85 75 45 60 105 75 25 33 NRV NRV minus NP Market Per Unit Inventory Value
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows:
Per Unit
Replacement
Selling
Price
Cost
Product
Cost
ABCDE
$ 45
$ 40
85
45
442623
$ 65
75
105
60
85
75
33
135
35
105
25
Selling costs consist of a sales commission equal to 15% of selling price and shipping costs equal to 5% of cost. The normal profit is
25% of selling price.
Required:
What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of
ending inventory?
Note: Do not round intermediate calculations. Round final answers to 2 decimal places.
Product
Cost
Replacement
cost
ABCDE
$
45 $
40
85
75
45
60
105
75
25
33
NRV
NRV minus NP
Market
Per Unit
Inventory
Value
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