A Particular Production Process Requires Two Types of Raw Materials

question 117

Essay

A particular production process requires two types of raw materials to produce the end product. Each unit of finished product requires three units of raw material A and 2 units of raw material B and processing costs of $35. The following provides information on inventories at year-end:
$$\begin{array} { | l | r | r | r | r | } \hline \text { Inventory item } & \text { \# units } & \text { Cost per unit } & \begin{array} { r } \text { Replacement } \\\text { cost }\end{array} & \begin{array} { r } \text { Net realizable } \\\text { value }\end{array} \\\hline \text { Finished product } & 800 & \$ 181 & \mathrm { NA } & \$ 161 \\\hline \text { Raw material A } & 150 & 10 & \$ 17 & \text { NA } \\\hline \text { Raw material B } & 110 & 58 & 53 & \text { NA } \\\hline\end{array}$$ Required:
a. Evaluate these inventories to determine the amount of write-down, if any.
b. Would your answer change if the replacement cost of raw material A were $11 per unit?

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Definitions:

Rational Emotive Behavioral Therapy

A cognitive-behavioral approach to psychotherapy that emphasizes the role of rational thinking in the emotional and behavioral lives of individuals.

Cognitive-behavioral Counseling

A form of psychotherapy that emphasizes the role of thinking patterns and behaviors in the development and treatment of psychological disorders, focusing on practical skills for change.

Socially Unacceptable Behavior

Actions that violate the norms or standards of behavior deemed acceptable by society.

Behavioralists

Scholars or practitioners who focus on behavioral changes as a primary method of understanding and treating psychological conditions.