Marcus Company Uses the Lower of Cost or Market Rule $\begin{array}{ll}\text { Transpoutation costs } & \$ 4.00 \\\text { Normal profit margin } & 11.70 \\\text { Packaging costs } & 4.20\end{array}$

question 76

Multiple Choice

Marcus Company uses the lower of cost or market rule in valuing its inventory.The floor constraint for one item in the inventory is $58.20.The following is other information concerning this unit: $\begin{array}{ll}\text { Transpoutation costs } & \$ 4.00 \\\text { Normal profit margin } & 11.70 \\\text { Packaging costs } & 4.20\end{array}$ The net realizable value for this item is

• A)$62.20
• B)$66.40
• C)$69.90
• D)$78.10

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Definitions:

Natural Resources

Raw materials and environmental assets that are found in nature and can be used for economic gain.

Elasticity of Demand

Estimating how much the demand for a product fluctuates in response to changes in its price.

Resource Markets

Markets in which business firms demand factors of production (for example, labor, capital, and natural resources) from household suppliers. The resources are then used to produce goods and services. These markets are sometimes called factor markets or input markets.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of selling at a specific price.