Headland Company follows the practice of pricing its inventory at the lower-of-c
ID: 2519807 • Letter: H
Question
Headland Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
From the information above, determine the amount of Headland Company inventory.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320 1,300 $3.78 $3.54 $5.31 $0.41 $1.48 1333 1,000 3.19 2.71 4.13 0.59 0.59 1426 900 5.31 4.37 5.90 0.47 1.18 1437 1,100 4.25 3.66 3.78 0.30 1.06 1510 800 2.66 2.36 3.84 0.94 0.71 1522 600 3.54 3.19 4.48 0.47 0.59 1573 3,100 2.12 1.89 2.95 0.89 0.59 1626 1,100 5.55 6.14 7.08 0.59 1.18Explanation / Answer
Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit NRV NRV less normal profit Market Lower of cost or market Inventory value 1320 1,300 $3.78 $3.54 $5.31 $0.41 $1.48 $4.90 $3.42 $3.54 $3.54 $4,602 1333 1,000 3.19 2.71 4.13 0.59 0.59 $3.54 $2.95 $2.95 $2.95 $2,950 1426 900 5.31 4.37 5.9 0.47 1.18 $5.43 $4.25 $4.37 $4.37 $3,933 1437 1,100 4.25 3.66 3.78 0.3 1.06 $3.48 $2.42 $3.48 $3.48 $3,828 1510 800 2.66 2.36 3.84 0.94 0.71 $2.90 $2.19 $2.36 $2.36 $1,888 1522 600 3.54 3.19 4.48 0.47 0.59 $4.01 $3.42 $3.42 $3.42 $2,052 1573 3,100 2.12 1.89 2.95 0.89 0.59 $2.06 $1.47 $1.89 $1.89 $5,859 1626 1,100 5.55 6.14 7.08 0.59 1.18 $6.49 $5.31 $6.14 $5.55 $6,105 Total $31,217 The amount of Headland Company’s inventory = $31217
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