Cramer Corporation Has Two Products in Its Ending Inventory and Uses

question 72

Essay

Cramer Corporation has two products in its ending inventory and uses lower of cost or market to account for each.Cramer normally prices its products to maintain a 30% gross profit margin.Specific data for each product follows:B.The replacement cost of $92 is between the ceiling ($148)and floor ($88)and is higher than historical cost.
$\begin{array}{lccc} & \text { Product A } & & \text { Product B } \\\text { Historical cost }& \$ 34 & & \$ 90 \\\text { Replacement cost } & 30 & & 92 \\\text { Estimated cost to dispose } & 10 & & 52 \\\text { Estimated selling price } & 60 & & 200\end{array}$
Required:
Using the lower of cost or market rule,what unit values should Cramer use to cost Products A and B in its ending inventory?

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Definitions:

Nonprofit Sector

The portion of an economy composed of organizations that aim to serve the public interest and are exempt from paying income taxes.

Philanthropy

The desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.

Minority Group

A category of people who experience relative disadvantage as compared to members of a dominant social group.

U.S. Census Bureau

A principal agency of the U.S. Federal Statistical System responsible for producing data about the American people and economy through censuses and surveys.