Question

Robust Inc. has the following information related to an item in its ending inventory. Product 66 has a cost of $162, a replacement cost of $155, a net realizable value of $160, and a normal profit margin of $10. What is the final lower-of-cost-or-market inventory value for product 66?

$160.
$152.
$162.
$155.

Answer 1

Answer:

final lower-of-cost-or-market inventory value is $155

correct option is $155

Explanation:

given data

product  cost = $162

replacement cost = $155

realizable value = $160

profit margin = $10

to find out

final lower-of-cost-or-market inventory value

solution

we know that according to the inventory accounting that

inventory value is the lower of cost or the market value or the replacement cost is taking as basis for the inventory fair value so

here we have given value $162 and $155 and $160

so the lower value of all these is $155

so  final lower-of-cost-or-market inventory value is $155

correct option is $155