2 The Inventory of Royal Decking consisted of five products, Information about t

Question

2 The Inventory of Royal Decking consisted of five products, Information about the December 31, 2018, Inventory is as follows s 4e s 60 1e0 130 3e Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost 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? 3 Answer is complete but not entirely correct Cost NRV Inventory B 80101 80 40 100 112 100 20 220

Explanation / Answer

Product Cost NRV Per unit inventory value A 40 52 40 B 80 86 80 C 40 70 40 D 100 112 100 E 20 26 20 *Calculation of NRV = Selling price - Sales commition *NRV of product B = 100 - [(10% of 100) + (5% of 80)] 100 - [10 + 4] 100 - 14 86

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