Question

Showtime Company’s ending inventory at December 31, 2020, includes the following items:

Product	Units on Hand			Unit Cost			Net Realizable Value Per Unit
BB		30		$	118		$	123
FM		15			153			146
MB		44			194			180
SL		48			86			100

Required:
Calculate LCNRV for the inventory:

a. As a whole (assuming the items are similar).

Answer 1

Answer (a) : Calculation of Total Cost and Total Net Realizable Value

	No of Units	Unit cost	Total Cost	NRV per unit	Total NRV
	(A)	(B)	(C) = (A)*(B)	(D)	(E) = (A)*(D)
BB	30	118	3,540	123	3,690
FM	15	153	2,295	146	2,190
MB	44	194	8,536	180	7,920
SL	48	86	4,128	100	4,800
Total			18,499		18,600

Value of Inventory = Lower of NRV ($18,600) and Cost($18,499) = $18,499

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