Question

In some instances accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases.
Cases
1 2 3 4 5
Cost $15.90 $16.10 $15.90 $15.90 $15.90
Sales price 14.80 19.20 15.20 10.40 17.80
Estimated cost to complete 1.50 1.90 1.65 .80 1.00
Estimated cost to sell .50 .70 .55 .40 .60

Answer 1

Answer:

1   $12.80

2   $16.10

3   $13.00

4   $9.20

5   $15.90

Explanation:

The unit value of inventory is to be valued  the lower of cost price and net realizable value.

Cost is the original purchase price while the net realizable value is the estimated selling price less of costs to complete and costs to sell as computed in the attached file.

Download xlsx