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:

Circadian Rhythm

The intrinsic system that manages the sleep-wake pattern, cycling approximately every 24 hours.

Temperature

A physical quantity that expresses hot and cold, measured with a thermometer and scientifically defined through thermodynamic principles.

Light

A specific segment of the electromagnetic spectrum that can be seen by the human eye.

Wake-Sleep Cycles

The recurring patterns of sleep and wakefulness, reflecting the natural internal process that regulates the body's sleep need, typically aligned with the 24-hour day-night cycle.