The Regal Plumbing Shop had 18 bathroom sinks in their ending inventory. The cost of each...
The Regal Plumbing Shop had 18 bathroom sinks in their ending inventory. The cost of each sink was $182.55. They valued this ending inventory at $3,238.56. If the lower-of-cost-or-market rule was used, what was the market price per unit of this inventory?
Homework Answers
Solution:
The market price per unit of this inventory was $179.92.
Explanation:
| Total units in the end | 18 units |
| The value of units in the end (when the lower- of -cost or market rule used) | $3,238.56 |
| The market price per unit | $179.92($3,238.56/18 units) |
The cost of each sink was $182.55. Then the cost of 18 units of sink was $3285.90 ($182.55 × 18).
But, shop used lower -of -cost or market rule, then ending inventory cost $3,238.56.So, the market price per unit was $179.92.
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