Reference no: EM132406721
Question
Presented below is information related to Swifty Inc.'s inventory, assuming Swifty uses lower-of-LIFO cost-or-market.
(per unit) Skis Boots Parkas
Historical cost $285.00 $159.00 $79.50
Selling price 318.00 217.50 110.63
Cost to distribute 28.50 12.00 3.75
Current replacement cost 304.50 157.50 76.50
Normal profit margin 48.00 43.50 31.88
Determine the following:
(a) The two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-of-cost-or-market computation for skis.
(b) The cost amount that should be used in the lower-of-cost-or-market comparison of boots.
(c) The market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.