Given the historical cost of product Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, and the cost to complete the product is $14, what is the amount that should be used to value the inventory under the lower-of-cost-or-net realizable value method?

Question

Quizplus · Accepted Answer

The lower-of-cost-or-net realizable value method requires the inventory to be valued at the lower of its historical cost or net realizable value (NRV).

NRV = Selling Price - Cost to Sell - Cost to complete
NRV = $90 - $16 - $14 = $60

Since the historical cost of $65 is higher than the NRV of $60, the inventory should be valued at $60, which is choice C.

Given the Historical Cost of Product Dominoe Is $65, the Selling