An item of inventory costing $750 can now only be sold at auction for $200. Auction costs of $50 will be incurred to make the sale. The net realisable value of the inventory is:
A) $200
B) $150
C) $700
D) $750

Question

Quizplus · Accepted Answer

The net realisable value of the inventory is the estimated selling price less any directly attributable costs. In this case, the estimated selling price is $200 and the directly attributable costs are $50. So, the net realisable value is $150 (i.e. $200 - $50). Therefore, the best choice is option B.

An Item of Inventory Costing $750 Can Now Only Be