Question

At Hawkeye Security the basic security system for home use has a cost of $160, a replacement cost of $150, a net realizable value of $145, and a normal profit margin of $20. Hawkeye Security would record ___ as the inventory value for this product using the lower-of-cost-or-market rule.

Answer 1

Answer:

$125

Explanation:

Net realizable  value                  $145

Less: Normal Profit Margin        ($20)

Inventory Value                          $125

Inventory value shall be NRV less normal profit for lower of cost or market value method.