Answer:
Unit values are given below
Explanation:
The unit value Royal Decking should use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory can be calculated as follows
Product Cost Replacement NRV NRV - NP Market Inventory Value
A $46 $41 $57.10 $40.60 $41 $41
B $86 $76 $91.10 $64.60 $76 $76
C $46 $61 $75.10 $53.60 $61 $46
D $106 $76 $117.10 $83.10 $83.10 $83.10
E $26 $34 $31.10 $22.10 $31.10 $26
Woking (NRV)
NRV = Selling price -Sales commission - Shipping cost
Product A ($66 - [$66*10%] - [$46*5%]) = $57.10
Product B ($106 - [$106*10%] - [$86*5%]) =$91.10
Product C ($86 - [$86*10%] - [$46*5%]) =$75.10
Product D ($136 - [$136*10%] - [$106*5%]) =$117.10
Product E ($36 - [$36*10%] - [$26*5%]) =$31.10
Working (NRV - NP
)
Product A ($57.10 - [$66*25%]) = $40.60
Product B ($91.10 - [$106*25%]) = $64.60
Product C ($75.10 - [$86*25%]) = $53.60
Product D ($117.10 - [$136*25%]) = $83.10
Product E ($31.10 - [$36*25%]) = $22.10
