Question

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 $ 80 $ 60 100 A 120 c 60 60 100 D 90 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? Per Unit Product Cost NRV Inventory Value A В C D E muo

Answer 1

Product	Cost	NRV	Per unit inventory value
A	60	69	60
B	100	103	100
C	60	87	60
D	60	78	60
E	20	26	20
Workings:
	A	B	C	D	E
Selling price	80	120	100	90	30
Less: Sales Commission	8	12	10	9	3
Less: Shipping costs	3	5	3	3	1
NRV	69	103	87	78	26