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Given :
Stand alone price of product B = $100
Price of the combined product = $120
To Find :
Stand alone price of product A
Solution :
Now,
Stand alone price of Product A = 120 - 100 = $20
The allocation ration for the product A and B =
<u>Stand alone price of product A</u>
Stand alone price of product B
<u> </u><u> </u><u>20</u><u> </u><u> </u> = 1:5
100
Allocated to the performance obligation for delivering product A =
$120 x <u> </u><u> </u><u>1</u><u> </u><u> </u><u> </u>
1+6
$17.1
So the answer is $ 17.1
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Answer:
D. Replacement cost.
Explanation:
As we know that the inventory should be recorded at the cost or market value whichever is lower
Given that
Original cost is less than the net realizable value subtract the profit margin
So we assume the following figures
Original cost $10
Net realizable value 9
Replacement cost 8
NRV less normal profit margin 7
As if we compare the original cost and replacement cost so the lower value is of replacement cost
hence, the same is to be considered
Therefore the correct option is D.
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