Lower of cost and net realizable value
Response to the following problem:
The inventory of Royal Decking consisted of five products. Information about the December 31, 2016, inventory is as follows:
| |
Per Unit |
|
Product
|
Cost
|
Selling Price
|
|
A
|
$40
|
$60
|
|
B
|
90
|
100
|
|
C
|
40
|
80
|
|
D
|
100
|
130
|
|
E
|
20
|
30
|
Costs to sell consist only 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 and net realizable value rule to units of inventory?