Question

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The inventory of Royal Decking consisted of five products. Information about the December 31, 2021, inventory is as follows: Per Unit Selling Price S 77 Replacement Cost 52 Product Cost 57 A В 97 87 117 C 57 72 97 D 117 87 147 45 E 37 47 Selling costs consist of a sales commission equal to 15% of selling price and shipping costs equal to 5% of cost. The normal profit is 40% of selling price Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? (Do not round intermediate calculations. Round final answers to 2 decimal places.) Per Unit Inventory Value Replacement Cost Cost NRV Product NRV-NP Market A E in ain m

Answer 1

Answers Product -A cost = 57 NRV = Estimated selling price - Estimated selling Expinsy = 77- (74 x 157.)- (57X54.) = 62.6 NRW-Wp = NRU-normal profit. = 62.6– (77x 40%.) - 31.8 Replacement cost=52 market = 52. inventory value per unit = min ( 37, 32) = 52. Produit-B Cost = 97. . NPU= Estimated selling price - Estimated sektoria Expense = 117 - (117x154.1-(97854.).' 5.94.6

NRW-Wp = nRv - normal profit = 94.6-(117x104.) = 47.8 Replacement Cost = 87 market = 87 inventory value per unit: min (97,87) -87 product wc cost=57. Replacement Cost = 7a. market = 72 NRV = 97-(97x154.)-(92254) = 77.6 NR v- NP = 77.6-(47x404.) = 38.8 invenilory valene per unit = min ( 57,79) =57

Produit-D! Cost = 117 Replacement cost = 87 market = 87 NRUS 147-6147 X154.) -(147 X54) 3.119.07 NRV-N0p = 119.06 (147x404.) = 60.27 inventory value per unit=min (inz, 87) =87 product-Et . Cost = 37 Replacement cost = 45 market = 376 NRV = 4:1 - (47x157.) - (47x5:) - 376 NRW-Wp = 37.6 – (u7x10.1.) = 18.8 inventory value per unit = min ( 37,376 ) =37

| market Inventory value per unit Replacement Product cost cost | NRV NRV-wp $57 $52 $62.6 $31.8 B 097 $87 $94.6 $47.8 $ 52 $ 52 $87 C $57 $ 72 $77.6 $38.8 $ 72 6 57 | D Ł@.095 tobul $ $ 87 $17 $87 $37 $45 $37.6 $87 $37,6 E $ 37. $18.8