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Cullumber Company sells product 2005WSC for $155 per unit. The cost of one unit of 2005WSC is $152, and the replacement cost is $151. The estimated cost to dispose of a unit is $6, and the normal profit is 40% of selling price. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market?

Respuesta :

Answer:

$149 is the correct answer to the given question .

Explanation:

As mention in the question the replacement cost of the product is $151

also the cost of disposal of product is =$6

The cost of the net realisable value i.e NRV is determined by the formula  

[tex]Net realisable value = Selling\ price \ of \ product - Cost \ of\ disposal \ of \ produt \\= $155 - $6 = $149[/tex]

Therefore the amount  of per unit reported  can be = to the matrix lower cost i.e equals to $149

Therefore $149 is the correct answer .

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