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The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory...

The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows:

Per Unit
Product Cost Selling Price
A $ 120 $ 140
B 160 180
C 80 160
D 80 120
E 20 40


Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost.

Required:
What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory?

Product Cost NRV Per Unit Inventory Value
A
B
C
D
E
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Answer #1

Hi

Let me know in case any issue and query:

NRV = Selling price - Disposal or selling cost

Required columns are highlighted in yellow, other are for calculation purpose: Solution: E=B-C-D Product Cost Pricel Commision Shipping cost $120.00 140.00$ 14.00 $ $160.00 $ 180.00$ 18.00 $ $ 80.00 160.00$ 16.00 $ $ 80.00 120.00$12.00 $ 20.00 $ 40.00 4.00 NRVLCNRV 6.00 120.00$ 120.00 8.00 $ 154.00$ 154.00 4.00 $ 140.00$ 80.00 4.00 $ 104.00$ 80.00 1.00 35.00 20.00 lling price Disposal or selling cost

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