Answer:
Unit value of $36 Ross should use when applying the lower of cost or net realizable value rule to ending inventory.
Explanation:
Inventory should be recorded on:
Lower of
Cost of product = $36 per unit
Net realizable value = selling price -selling cost = $48 - $6 = $42
So the lower value is the cost value of $36 for the product. So, this value should be used in order to determine the cost of ending inventory.
Answer:
$36
Explanation:
According to IAS 2 inventories, Inventory is to be recognized at cost but subsequently carried at the lower of cost or net realizable value.
Given that Per unit data consist of the following: cost, $36; selling price, $48; selling costs, $6.
Applying the lower of cost or net realizable value rule to ending inventory, the unit value
cost = $36
net realizable value = $48 - $6 = $42
The lower of cost or net realizable value is the cost. Hence, the unit value of inventory will be the cost at $36.
