Nutone Values Its Inventory on the Lower of Cost and Market

question 115

Multiple Choice

Nutone values its inventory on the lower of cost and market basis. The following data came from the 20X7 inventory, which consisted of two items: $$\begin{array} { | l | r | r | } \hline & \text { Components } & \text { Cables } \\\hline \text { Original cost } & \$ 12,000 & \$ 15,000 \\\hline \text { Selling price } & 15,000 & 26,000 \\\hline \text { Estimated selling costs } & 5,000 & 10,000 \\\hline \text { Normal profit margin } & 1,500 & 1,000 \\\hline\end{array}$$ What would be the value of inventory on Nutone's statement of financial position?

• A) $29,000
• B) $24,000
• C) $25,000
• D) $27,000

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Definitions:

Feared Stimulus

An object, event, or situation that induces fear through conditioning or innate phobias.

Avoidance Behavior

Actions taken to prevent or evade a negative or undesirable outcome or stimulus.

Escape Behavior

A response designed to avoid an unpleasant situation or outcome, often seen in the context of avoiding negative reinforcement.

Two-Factor Theory

A psychological theory that proposes emotions are based on physiological arousal and cognitive labeling of that arousal.