A Firm Is Writing Its Inventory Down to the Lower

question 122

Multiple Choice

A firm is writing its inventory down to the lower of cost or market. It has determined the following per unit costs and market prices for its product: $\begin{array}{ll}\text { Original cost } & \$ 104 \\\text { Sales price } & 120 \\\text { Selling cost } & 20 \\\text { Normal profit } & 18 \\\text { Replacement cost } & 78\end{array}$ Given these data, the firm should value its inventory at a per unit cost of

• A) $104
• B) $100
• C) $82
• D) $78

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Definitions:

Tolerance

The amount of variation from a standard value that is permissible.

Impedance

The total opposition a circuit presents to the flow of alternating current, combining both resistance and reactance.

Low-pass Filters

Electronic circuits that pass signals with a frequency lower than a certain cutoff frequency and attenuate signals with frequencies higher than the cutoff frequency.

Inductor

A passive electrical component used in circuits to store energy in a magnetic field when electric current flows through it.