Chapter 9, Problem 9.2E

Lower of cost or net realizable value

• LO9–1

The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows:

	Per Unit
	Product Cost	Selling Price
A	$ 40	$ 60
B	80	100
C	40	80
D	100	130
E	20	30

Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost.

Required:

What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory?