Question

Data related to the inventories of Costco Medical Supply are presented below: Surgical Surgical Rehab Rehab Equipment Supplies Equipment Supplies Selling price $ 260 $ 100 $ 340 $ 165 Cost 170 90 250 162 Costs to sell 30 15 25 10 In applying the lower of cost or net realizable value rule, the inventory of surgical supplies would be valued at: Multiple Choice $75. $90. $85.

Answer 1

Answer:

$85

Explanation:

Costco Medical Supply's inventory:

                   Surgical Eq - Surgical Supp - Rehab Eq - Rehab Supp

Selling price     $260                  $100           $340               $165

Cost                  $170                     $90           $250              $162

Costs to sell     $30                      $15              $25                 $10

If we apply the net realizable value rule, the value of surgical supplies would be:

NRV = $100 = $15 = $85

the NRV is also the lower of cost since $85 < $90