Robust Inc.has the following information related to an item in its ending inventory.Product 66 has a cost of $6,500, a selling price of $7,100, a cost to complete of $600, and a cost to sell of $400.What is the lower-of-cost-or-net realizable value for product 66?

Question

Quizplus · Accepted Answer

The lower-of-cost-or-net realizable value is the lower of the cost and the net selling price of the item.

The cost of Product 66 is $6,500.

The net selling price is the selling price minus the cost to complete and the cost to sell, which is: 
$7,100 - $600 - $400 = $6,100

Therefore, the lower-of-cost-or-net realizable value for Product 66 is $6,100, which is the lower of the cost and the net selling price, making answer B the correct choice.