Question
why is the answer $16.
4/18/16 17 Muckenthaler Company sells product 2005wsc for s20 per The cost of one of 2005 WSC is $18, and the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40%. At what amount per unit should product 2005 wsC be reported, applying lower-of-cost-or-market? A) S8. B) $16. C) $17. D) $18. 18. Given the historical cost of product Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, the replacement cost for product Dominoe is $60, and the normal profit margin is 20% of sales price, what is the cost
Explanation / Answer
Answer:
Here,
Cost per unit = $18
Market value (Net of Cost of disposition) = 20 - 4 = $16
Therefore, Applying Lower of Cost or Market value concept, the amount to be reported per unit of 2005WSC is
$16.
Answer : B