Calculate the limits for each case

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Question - You are the accountant for Lorac Corporation. You are using the lower-of-cost-or-market rule to determine the carrying value for inventory in 4 separate cases (Basic Info is below). Assume in each case that the costs of disposal etc are $16 per unit and that the normal profit is $10 per unit.

 

Selling Price

Cost

Replacement Cost

Case #1

$118

$94

$86

Case #2

$94

$80

$72

Case #3

$120

$90

$88

Case #4

$96

$80

$84

Required - Calculate the limits for each case. Then enter the amount that should be used for lower of cost or market.

Reference no: EM133075774

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