It is called the marginal cost
Question:
The use of the lower of cost or net realizable value (LCNRV) method to value inventory for reporting purposes is a departure from the accounting principle of:
A) Historical cost.
B) Matching.
C) Going concern.
D) Conservatism.
Answer:
The Right answer is A) Historical Cost.
Explanation:
Inventories are recorded at their cost. If inventory declines in value below its original cost, a major departure from the historical cost principle occurs.
Whatever the reason for a decline-damage, physical deterioration, obsolesce, changes in price levels, or other causes, a company should write down the inventory to Lower-of-Cost or Net Realizable Value (LCNRV) to report this loss.
A company abandons the historical cost principle when the future utility (revenue-producing ability) of the asset drops below its original cost.
Net Realizable Value refers to the net amount that a company expects to realize from the sale of inventory. Specifically, net realizable value is the estimated selling price in the normal course of business minus estimated costs to make a sale.
Example
Inventory Value - Unfinished $2,000
Less: Estimated Cost of Completion $ 50
Estimated Cost to sell <u>200</u> <u> 250</u>
<u>Net Realizable Value 750</u>
<u />
Cheers!
Answer:
A
Explanation:
the price of product will increase
From what I researched $109.99 not sure if that's sure tho
Answer:
B. a fixed-price contract.
Explanation:
"A fixed price contract places minimum administrative burden on the contracting parties, but subjects the contractor to the maximum risk arising from full responsibility for all cost escalations. Also called firm price contract."
Mr. Plow couldn't come back to Springfield because he took full responsability for all cost escalations.
Reference: WebFinance Inc. “What Is Fixed Price Contract? Definition and Meaning.” BusinessDictionary.com, 2019
