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# homework%20solutions%20chapters%209 - E9-1 Product A B Cost...

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E9-1 Replacement   Net Realizable Net Realizable Value Less Product Cost        Cost           Value (Ceiling)    Normal Markup (floor)        A\$68   \$60 \$140 - \$32 = \$108 \$108 - 30% (\$140) = \$66 a      B \$91   \$93 a \$200 - \$52 = \$148 \$148 - 30% (\$200) = \$88 a Designated market value Inventory valuation: Product A--\$66 Net realizable value less a normal markup is used because  replacement cost is less than the floor and net realizable value less a  normal markup is less than cost. Product B--\$91 Cost is used here because replacement cost, which is between the  ceiling and floor, is higher than the cost. E9-3 Lower of Cost 1. Product Units          or Market           Inventory Value A    600   \$  0.80                       \$ 480 B       250       \$  1.50                          375 C        150       \$  5.00                          750 D        100           \$  6.40                          640 E         80         \$24.60                       1,968                 Total inventory value                      \$4,213

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E9-3    (continued) 2.                                         Lower of Cost Product      Cost      Market           or Market                           Group 1 A 600      \$600            \$480.00 B 250        375            387.50 Total     \$975          \$867.50     \$   867.50                        Group 2 C   150     \$   750     \$   787.50
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homework%20solutions%20chapters%209 - E9-1 Product A B Cost...

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