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26 April, 04:14

Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $36; selling price, $48; selling costs, $6. What unit value should Ross use when applying the lower of cost or net realizable value rule to ending inventory?

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  1. 26 April, 05:00
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    Unit value of $36 Ross should use when applying the lower of cost or net realizable value rule to ending inventory.

    Explanation:

    Inventory should be recorded on:

    Lower of

    Cost Net realizable value

    Cost of product = $36 per unit

    Net realizable value = selling price - selling cost = $48 - $6 = $42

    So the lower value is the cost value of $36 for the product. So, this value should be used in order to determine the cost of ending inventory.
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