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Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the products are as follows:
Product 1 Product 2 Product 3
Cost $ 37 $ 107 $ 67 Selling price 91 171 121 Costs to sell 10 74 27 Required:
What unit values should Herman use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to ending inventory?

Respuesta :

Using the lower of cost or net realizable value rule to end inventory, Herman should utilize 37 of product 1, 97 of product 2, and 67 of product 3 as the unit values.

Inventory value Cost Selling Price Costs to Sell NRV

  A              B                     C           D=(B-C) E= (lower of A&D)

Product 1        37            91                   10                 81              37

Product 2       107          171                  74                97              97

Product 3        67          121                  27               94               67

The concept of inventory includes both the raw materials utilized in manufacturing and the final goods that are made available for sale. Inventory is one of a company's most significant assets because it is one of the primary means of producing income and, as a result, a source of profits for the company's shareholders. The three different types of inventory are finished goods, works in progress, and raw materials. It is indicated as a liquid asset on the statement of financial position.

To learn more about assets please click on the given link: https://brainly.com/question/14404094

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