Konan, Inc -The Minimum Limit for Market Value of Product M-23 Is

question 148

Multiple Choice

Konan, Inc. uses the lower of cost or market method to determine inventory value. The following information pertains to the ending inventory:
$\begin{array}{lccccc}\text { Item } & \text { Cost } & \begin{array}{c}\text { Replacement } \\\text { Cost }\end{array} & \begin{array}{c}\text { Selling } \\\text { Price }\end{array} & \begin{array}{c}\text { Cost of } \\\text { Completion }\end{array} & \begin{array}{c}\text { Normal } \\\text { Profit }\end{array}\\\text { L-19 } & \$ 40 & \$ 38 & \$ 50 & \$ 2 & \$ 11 \\\text { M-23 } & 52 & 40 & 60 & 4 & 14 \\\text { N-05 } & 20 & 24 & 30 & 2 & 6\end{array}$
-The minimum limit for market value of product M-23 is

• A)$42.
• B)$46.
• C)$56.
• D)$60.

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Definitions:

Reinstatement

The process of restoring a previous condition or position, such as reinstating a lapsed insurance policy or an employee's job position.

Receipt of Cash

The process of receiving cash as a form of payment, often recorded during accounting transactions.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its credit customers, calculated as sales divided by the average accounts receivable.

Days' Sales in Receivables

A financial metric that measures how quickly a company collects on sales made on credit, indicating the average number of days it takes to convert receivables into cash.