A particular production process requires two types of raw materials to produce the end product. Each unit of finished product requires three units of raw material A and 2 units of raw material B and processing costs of $35. The following provides information on inventories at year-end:
Required:
a. Evaluate these inventories to determine the amount of write-down, if any.
b. Would your answer change if the replacement cost of raw material A were $11 per unit?

Question

A particular production process requires two types of raw materials to produce the end product. Each unit of finished product requires three units of raw material A and 2 units of raw material B and processing costs of $35. The following provides information on inventories at year-end:
  Required:
a. Evaluate these inventories to determine the amount of write-down, if any.
b. Would your answer change if the replacement cost of raw material A were $11 per unit?

Quizplus · Accepted Answer

The Answer of A particular production process requires two types of raw materials to produce the end product. Each unit of finished product requires three units of raw material A and 2 units of raw material B and processing costs of $35. The following provides information on inventories at year-end:
  Required:
a. Evaluate these inventories to determine the amount of write-down, if any.
b. Would your answer change if the replacement cost of raw material A were $11 per unit?

A Particular Production Process Requires Two Types of Raw Materials