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25 November, 05:32

Given the acquisition cost of product Z is $43, the net realizable value for product Z is $37, the normal profit for product Z is $2, and the market value (replacement cost) for product Z is $38, what is the proper per unit inventory value for product Z applying LCM? $37. $35. $38. $43.

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  1. 25 November, 09:17
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    proper per unit inventory value for product Z applying LCM is $38

    Explanation:

    given data

    cost of product Z = $43

    net realizable value product Z = $37

    normal profit for product Z = $2

    market value product Z = $38

    solution

    first we get here difference between Net realizable value and profit that is

    Net realizable value - normal profit

    = $37 - $2

    = $35

    so here now we get proper per unit inventory is

    proper per unit inventory = lower of cost or market value

    so here market value product Z is lower so

    proper per unit inventory value for product Z applying LCM is $38
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