Question

Given the acquisition cost of product Z is $80, the net realizable value for product Z is $72, the normal profit for product Z is $6, and the market value (replacement cost) for product Z is $75, what is the proper per unit inventory price for product Z?

Answer 1

Answer:

The proper per unit inventory price for product Z is $72.

Explanation:

The inventory is valued at cost or Net Realizable Value (NRV) whichever is lower. Therefore, the proper per unit inventory price for product Z is $72.