why is the answer $16. 4/18/16 17 Muckenthaler Company sells product 2005wsc for

Question

why is the answer $16.

4/18/16 17 Muckenthaler Company sells product 2005wsc for s20 per The cost of one of 2005 WSC is $18, and the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40%. At what amount per unit should product 2005 wsC be reported, applying lower-of-cost-or-market? A) S8. B) $16. C) $17. D) $18. 18. Given the historical cost of product Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, the replacement cost for product Dominoe is $60, and the normal profit margin is 20% of sales price, what is the cost

Explanation / Answer

Answer:

Here,

Cost per unit = $18

Market value (Net of Cost of disposition) = 20 - 4 = $16

Therefore, Applying Lower of Cost or Market value concept, the amount to be reported per unit of 2005WSC is

$16.

Answer : B

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