Avanti Co Purchased Inventory for $700

question 10

Short Answer

Avanti Co purchased inventory for $700.While on display the goods were damaged and made nearly worthless.It is determined that the goods can be sold at auction for $65 with the auctioneer taking $10 of that amount for his fee.The net realisable value of the goods is $_______.

---

Definitions:

Cost Formula

An equation used to predict the total cost of production based on fixed costs and variable costs relative to the level of output or activity.

Spending Variance

Spending variance is the difference between the budgeted or standard cost of expenses and the actual amount spent, indicating whether costs were higher or lower than expected.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor, including costs related to operating the factory like rent, utilities, and equipment depreciation.

Activity Variance

The difference between planned activity levels and actual activity levels, used for budgeting and planning purposes.