Foley Company Applied FIFO to Its Inventory and Got the Following

question 18

Essay

Foley Company applied FIFO to its inventory and got the following results for its ending inventory.
DVRs 140 units at a cost per unit of $59
DVD players 210 units at a cost per unit of $75
iPods 175 units at a cost per unit of $80
The cost of purchasing units at year-end was DVRs $71, DVD players $68, and iPods $78.
Instructions
Determine the amount of ending inventory at lower-of-cost-or-net realizable value.

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Definitions:

Economic Profit

The surplus left after subtracting total costs from total revenue, taking into account both explicit and implicit costs.

Total Revenue

The overall amount of money generated by a business from its sales of goods or services, calculated by multiplying the selling price by the quantity sold.

Maximizes Profits

The strategy employed by firms to achieve the highest possible profit from their operations, often through increasing revenue, reducing costs, or both.

Monopolistically Competitive

A market structure characterized by many firms selling products that are substitutes but differentiated from one another.