Welsh Company purchased an item for inventory that cost $10 per unit and was marked to sell at $14.It was determined that the replacement cost is $9 per unit.No purchases in the near future are anticipated.Using the lower of cost and net realizable value rule,what is the per unit valuation for inventory?
A)$9.00
B)$10.00
C)$12.00
D)$14.00

Question

Quizplus · Accepted Answer

According to the lower of cost and net realizable value rule, inventory should be valued at the lower of its cost or net realizable value. In this case, the replacement cost of the item is $9 per unit, which is lower than the original cost of $10 per unit. Therefore, the per unit valuation for inventory should be $9.00.

Welsh Company Purchased an Item for Inventory That Cost $10