Remus Machinery sells parts for farm equipment. Remus is concerned whether a specific part (Part X41) is impaired. Part X41 has an estimated selling price of $500. The cost to finish and sell Part X41 is $150. The cost of Part X41 on Remus's inventory account is $400. If Remus were to buy Part X41 from its supplier, the current replacement cost is $250. The normal profit margin on Part X41 is $50.

What should be the inventory value of Part X41 if Remus uses the LCM (Lower of Cost or Market) method?

 

Answer rating: 100% (QA)

To determine the inventory value of Part X41 using the Lower of Cost or Market LCM method we need to ... View the full answer