The Maxa Company Normally Sells Its Inventory at a 20

question 51

Multiple Choice

The Maxa Company normally sells its inventory at a 20% profit margin on sales. In 2014, the net realizable value of inventory purchased for $75,000 declined to $66,000. There are no costs to complete and dispose of this inventory. What is the floor constraint on the valuation of this inventory using the lower of cost or market rule?

• A) $60,000
• B) $66,000
• C) $79,200
• D) $52,800

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