If the Cost of an Item of Inventory Is $60

question 193

Multiple Choice

If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is

• A) $15
• B) $60
• C) $75
• D) $135

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Definitions:

Profit

The financial gain derived from the difference between the revenue earned from selling a good or service and the costs associated with its production and sale.

Marginal Revenue

The additional revenue that is gained from selling one more unit of a good or service.

Marginal Revenue

The additional income earned from the sale of one more unit of a product or service.

Cheese

A dairy product derived from milk that is produced in a wide range of flavors, textures, and forms by coagulating the milk protein casein.