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Question - The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows:
Product
Per Unit
Cost
Replacement Cost
Selling Price
A
$51
$46
$71
B
91
81
111
C
51
66
D
141
E
31
39
41
Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal gross profit percentage is 35% of selling price.
Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory?
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