Robust Inc. has the following information related to an item in its ending inventory. Packit (Product # 874) has a cost of $131, a replacement cost of $101, a net realizable value of $117, and a normal profit margin of $5. What is the final lower-of-cost-or-market inventory value for Packit?
A) $112.
B) $131.
C) $101.
D) $117.

Question

Quizplus · Accepted Answer

The final lower-of-cost-or-market inventory value for Packit is $112, which is the lower of the cost ($131) and the net realizable value ($117-$5 = $112).