Question

The inventory of Royal Decking consisted of five products. Information about the December 31, 2021, inventory is as foll...

The inventory of Royal Decking consisted of five products. Information about the December 31, 2021, inventory is as follows:

Per Unit
Product Cost Selling Price
A $ 200 $ 220
B 240 260
C 120 240
D 160 300
E 100 140


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?

Product Cost NRV Per Unit Inventory Value
A
B
C
D
E
1 0
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Answer #1

Computation of NRV Per Unit Product А Selling price(A) Sales Commission = 10% of selling price (B) 220.00 $ 22.00 260.00 $ 26

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