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zvonat [6]
3 years ago
10

Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the product

s are as follows: Product 1 Product 2 Product 3 Cost $ 26 $ 96 $ 56 Replacement cost 24 91 46 Selling price 46 126 63 Selling costs 8 31 14 Normal profit margin 11 36 18 Required: What unit values should Herman use for each of its products when applying the lower of cost or market (LCM) to ending inventory
Business
1 answer:
Brrunno [24]3 years ago
5 0

Answer and Explanation:

The computation of the unit values for each of the product using the lower of cost or market (LCM) for ending inventory is shown below:

For Product 1

The Cost is $26

And, the market value = Selling price - selling cost - normal profit margin

 = $46 - $8 - $11

= $27

So, the lower value would be $26

For Product 2

The Cost is $96

And, the market value = Selling price - selling cost

= $126 - $31

= $95

So, the lower value would be $95

For Product 3

The Cost is $56

And, the market value = Selling price - selling cost

= $63 - $14

= $49

So the lower value would be $49

As we can see that

In the product 2, the replacement cost is $91 and the market value without taking the normal profit margin is $36 that is lower than the replacement cost so we do not considered the normal profit margin in the computation part

This same method is applied for the product 3 as well

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Vadim26 [7]

These people perform many of the activities required to move products efficiently from producers to consumers or industrial buyers and are often wholesalers

Who are wholesalers ?

A wholesaler is a company or individual that purchases great quantities of products from manufacturers, farmers, other producers, and vendors. Wholesalers store them in warehouses and sell them on to retailers (shops and stores) and businesses.

Wholesalers are the merchant middlemen who sell mainly to retailers, other merchants, commercial, industrial, or institutional users. They buy principally for resale or business use.

The wholesaler’s business model is based on being the intermediary – the go-between. They operate between a product’s manufacturer and other businesses that want to sell that product.

What is the role of a retailers?

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4 0
2 years ago
The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking u
olasank [31]

<u>Solution and Explanation:</u>

Answer 1  The Net present value = the Present value of all the cash inflows minus the present value of all the cash outflows

$=145000 /(11 \text { percent minus } 4 \text { percent })-1900000$

= $171428.57

Answer a-2) yes, definitely the business should be started as the net present value is positive.

Answer b) Break even growth rate = the required rate – Cash flows / investment

=11 \%-145000 / 1900000

= 3.37 percent.

5 0
3 years ago
Suppose that we want to evaluate the e ect of several variables on annual saving and that we have a panel data set on individual
Flauer [41]

Answer:

Detailed solution is given below:

7 0
3 years ago
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A firm is considering moving from the United States to Mexico. The firm pays its U.S. workers $30.00 per hour. Currently, U.S. w
Rama09 [41]

Answer: $6.00

Explanation:

From the question, we can see that the productivity in the United States is (45/9) = 5 times higher than that of Mexico.

Therefore, the wages in Mexico should be 5 times lower than the wages paid to the workers in the United States. This will be:

= $30.00 / 5

= $6.00

Therefore, in order for the firm to reduce its wage cost per unit of output by moving to Mexico, the wages in Mexico must be below $6.00 per hour.

4 0
3 years ago
Concord Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were
nexus9112 [7]

Answer:

$2,317,000

Explanation:

The computation of the weighted-average accumulated expenditures for interest capitalization purposes is shown below:

For expenditure on March 1

= $1,932,000 × 10 months ÷ 12 months

= $1,610,000

On June 1

= $1,212,000 × 7 months ÷ 12 months

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On December 31, it would be zero

So, the accumulated expenditures is

= $1,610,000 + $707,000

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