Asked by
gabriella salmeron
on Oct 16, 2024
Verified
A company's normal selling price for its product is $20 per unit.However,due to market competition,the selling price has fallen to $15 per unit.This company's current FIFO inventory consists of 200 units purchased at $16 per unit.Net realizable value has fallen to $13 per unit.Calculate the value of this company's inventory at the lower of cost or market.
A) $2,550.
B) $2,600.
C) $2,700.
D) $3,000.
E) $3,200.
FIFO Inventory
An accounting method where the first items added to inventory are the first ones considered sold.
Net Realizable Value
The estimated selling price of goods minus the cost of completion and the costs necessary to make the sale.
Lower Of Cost
A accounting principle that mandates reporting the cost of inventory and other assets at the lower of their original cost or current market value.
- Learn the principles of the lower of cost or market method for determining inventory value.
Verified Answer
AB
Learning Objectives
- Learn the principles of the lower of cost or market method for determining inventory value.