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Quiz 9 - 1 Lowerofcostormarket StudentResponse A...

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1.   Lower-of-cost-or-market    Student Response Value Correct Answer Feedback A. is most conservative  if applied to the total  inventory.      B. is most conservative  if applied to major  categories of  inventory.      C.  is most conservative  if applied to individual  items of inventory. 100%       D.  must be applied to  major categories for  taxes.       Score: 1/1    2.      Paul Konerko Company sells product 2005WSC for $20 per unit. The cost of one unit of 2005WSC is $18, and  the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40%.  At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market?   
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Score: 1/1    3.      In 2006, Lucas Manufacturing signed a contract with a supplier to purchase raw materials in 2007 for $700,000.  Before the December 31, 2006 balance sheet date, the market price for these materials dropped to  $510,000. The journal entry to record this situation at December 31, 2006 will result in a credit that  should be reported    Score: 1/1    4.
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