Question

# The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory...

The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows:

 Per Unit Product Cost Selling Price A \$ 140 \$ 160 B 180 200 C 140 180 D 100 150 E 60 80

Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost.

Required:
What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory?

 Product Cost Per Unit Selling Price Cost to sell NRV = SP - Cost to sell Inventory Value = [Lower of {Cost} and [NRV] A \$140.00 \$160.00 \$23.00 \$137.00 \$137.00 B \$180.00 \$200.00 \$29.00 \$171.00 \$171.00 C \$140.00 \$180.00 \$25.00 \$155.00 \$140.00 D \$100.00 \$150.00 \$20.00 \$130.00 \$100.00 E \$60.00 \$80.00 \$11.00 \$69.00 \$60.00

OR

 (a) (b) (c) (d) Product Selling Price Sales Commission (a) x 10% Cost Per Unit Shipping Cost (c) x 5% NRV = (a - b- d) Inventory Value = [Lower of {Cost} and [NRV] A \$160.00 \$16.00 \$140.00 \$7.00 \$137.00 \$137.00 B \$200.00 \$20.00 \$180.00 \$9.00 \$171.00 \$171.00 C \$180.00 \$18.00 \$140.00 \$7.00 \$155.00 \$140.00 D \$150.00 \$15.00 \$100.00 \$5.00 \$130.00 \$100.00 E \$80.00 \$8.00 \$60.00 \$3.00 \$69.00 \$60.00
 Cost to Sell = 10% of selling price + 5% of Cost