Cost price per unit = $32
Net realisable value = $30
Normal profit = $2
Replacement cost = $27
Net realisable value less normal profit=30-2=$28
Since current replacement cost is lower than net realisable value less a normal profit margin, hence net realisable value less normal profit margin will be considered as market value of inventory.
Hence inventory as per LCM = $28
Second option is correct option.
Given the acquisition cost of product ALPHA is $32, the net realizable value for product ALPHA...
Given the acquisition cost of product Z is $27, the net realizable value for product Z is $24, the normal profit for product Z is $2, and the market value (replacement cost) for product Z is $25, what is the proper per unit inventory value for product Z applying LCM?
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Bramble Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCM) basis in valuing inventories. Net realizable Product Cost value A $114000 $128000 B 83000 78000 C 152000 165000 If Bramble applies the LCNRV basis, the value of the inventory reported on the balance sheet would be
EXIOIL 9. Inventory Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Item Birch 27 $144 $162 Cypress 43 230 251 Mountain Ash 22 66 86 Spruce 50 206 226 Willow 39 238 248 Inventory at the Lower of Cost or Market Total LCM Inventory Item Birch Total Cost Total Market 3,888 $ Cypress 9,890 ✓ Mountain Ash 1,452 ✓ Spruce 10,300 ✓ Willow 9.2827 Total 34,812 ✓ $ Feedback Check My Work o
Lower-of-Cost-or-Net Realizable Value Method The following data are taken from the Simpson Corporation's inventory accounts: Net Item Unit Realizable Code Quantity Cost Value Product 1 ZKE 100 552 $50 ZKF 300 63 Product 2 MNJ 400 52 MNS 2006 Calculate the value of the company's ending inventory using the lower-of-cost-or-market method applied to each item of inventory. Applying the lower-of-cost-or-market method to each item of the inventory results in an ending inventory amount of S Previous Save Answers
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