Ask Question
BusinessBusiness
22 May, 12:34

Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $32; replacement cost, $30; selling price, $42; selling costs, $8. The normal profit is 20% of selling price. What unit value should Ross use when applying the lower of cost or market (LCM) rule to ending inventory?

+3
Answers (1)
  1. 22 May, 14:55
    0
    The unit price should be $25.6

    Explanation:

    Net realization value = selling price - selling cost

    = $42 - $8

    = $34

    Profit margin = 20% of selling price

    = 0.2 * $42

    = $8.4

    NRV - profit margin:

    = $34 - $8.4

    = $25.6

    Since we don't have replacement cost in the question. Hence, the market value is lower of (NRV, NRV-Profit) = $25.6

    The unit price should be $25.6
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $32; replacement cost, $30; selling ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
On January 1 of this year, Gateway Company issued bonds with a face value of $1 million and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31.
Answers (1)
You work part time in a telemarketing company. Your compensation is based on the number of credit card applicants you sign up.
Answers (1)
Following question #14, suppose the project requires an initial investment in net working capital of $300,000, and maintains at this level until the end of year 2. And, this net working capital will be recovered at the end of the project.
Answers (1)
In addition to the three basic financial statements, which of the following is also a required financial statement? a. The "Cash Budget" b. Statement of Cash Flows c. Statement of Cash Inflows and Outflows d. The "Cash Reconciliation"
Answers (1)
The Harsanyi Corp. is considering four investments. Which provides the highest after-tax return for Harsanyi Corp. if it is in the 34% federal tax bracket
Answers (1)
New Questions in Business
Meeting others through volunteer work is the most common way people expand their network.
Answers (1)
Explain the natural and necessary shifts of resources in a market economy.
Answers (1)
In a pure market economy, the government controls most actions. A. True False
Answers (2)
In the 19th century, when crop failures often led to bank runs, banks would make relatively fewer loans and hold relatively more excess reserves. By itself, these actions by the banks should have a.
Answers (1)
Jenny sells lemonade in front of her house in the summer. Several other kids in Jenny's neighborhood also run lemonade stands in the summer.
Answers (1)
Home » Business » Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $32; replacement cost, $30; selling price, $42; selling costs, $8. The normal profit is 20% of selling price.
Sign Up Forgot Password?