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Debora [2.8K]
3 years ago
11

Cullumber Company uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at De

cember 31. Item Units Unit Cost Net Realizable Value Cameras: Minolta 3$172$152 Canon 9140170 Light meters: Vivitar 13130100 Kodak 16117128 Determine the amount of the ending inventory by applying the lower-of-cost-or-net realizable value basis. The ending inventory $enter The ending inventory in dollars
Business
1 answer:
Anvisha [2.4K]3 years ago
4 0

Answer:

Cullumber Company

The ending inventory is:

= $4,888.

Explanation:

a) Data and Calculations:

Item      Units     Unit Cost     Net Realizable Value   Value of Ending

Cameras:                                                                       Inventory (LCNRV)

Minolta      3            $172                 $152                             $456 ($152 * 3)

Canon       9              140                   170                              1,260 ($140 * 9)

Light meters:

Vivitar      13              130                   100                              1,300 ($100 * 13)

Kodak     16               117                    128                              1,872 ($117 * 16)

Total value of Ending Inventory based on LCNRV =          $4,888

b) The Lower of cost- or net realizable value method of valuing ending inventory determines the value by choosing the lower value between the cost price of the inventory and the net realizable value.  The purpose that is served by using the LCNRV method is that it reflects the decrease of inventory value when it goes below its original cost while at the same time it does not recognize the increased market value when the cost is lower.

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Two or more organizations that join forces in order to achieve advantages that neither can perform as well alone are known as __
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Answer:

correct answer is Strategic allies

Explanation:

Strategic allies is a arrangement between 2 or more than 2 organization for undertaking mutual beneficial projects even both retain their independence.

as they have less complex than a joint venture  

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5 0
3 years ago
Segmented Income Statement Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The follo
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Answer:

Poinsettias records a loss of $118,125            

Fruit Trees records a profit of $92,325        

The company therefore records an overall $25,800 loss

NB: See the workings below see the assumption mad to allocate common expenses since none is given in the question.

Explanation:

Variable costing income statement is a type of income statement that records variable cost separately first to determine the contribution margin and thereafter record the fixed cost which is further split into direct fixed expenses and common expenses.

The segmented income statement for Gorman Nurseries for the coming year can therefore be presented as follows:

Gorman Nurseries Inc.

Segmented Income Statement

For the coming year

Particulars                        Poinsettias ($)     Fruit Trees ($)    Total ($)

Sales                                         970,000           3,100,000        4,070,000

Variable COGS                       (460,000)         (1,630,000)     (2,090,000)

Variable selling exp. (w1.)  <u>       (38,800)  </u>     <u>     (124,000) </u>    <u>    (162,800)  </u>

Contribution margin                 471,200            1,346,000      1,817,200

Direct fixed overhead             (160,000)          (200,000)       (360,000)

Direct fixed S $ Admn exp.  <u>   (146,000) </u>     <u>       (87,000) </u>    <u>    (233,000) </u>

Segment margin                       165,200           1,059,000      1,224,200

Common fixed overh. (w2a)     (176,077)           (623,923)     (800,000)

Common S $ Admn ex (w2b)  <u> (107,248)  </u>      <u>   (342,752) </u>    <u>  (450,000) </u>

Segment Net Income (loss)   <u> (118,125)  </u>       <u>       92,325 </u>    <u>    (25,800) </u>

Workings:

w1. Variable selling expenses = Sales * Commission percentage

Poinsettias = $970,000 * 4% = $38,8000

Fruit Trees = $3,100,000 * 4% = $124,000

w2. Allocation of common expenses using the following assuptions:

a) Use cost of goods sold (COGS) to allocate Common fixed overhead:

Poinsettias = (460,000 / 2,090,000) * $800,000 = $176,077

Fruit Trees = (1,630,000 / 2,090,000) * $800,000 = $623,923

b) Use common selling and administrative expense using Sales:

Poinsettias = (970,000 / 4,070,000) * $450,000 = $176,077

Fruit Trees = (3,100,000 / 4,070,000) * $450,000 = $623,923

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