If the Replacement Cost of a Unit of Inventory Has

question 54

Multiple Choice

If the replacement cost of a unit of inventory has declined below original cost,but the replacement cost exceeds net realizable value,the amount to be used for purposes of inventory valuation is

• A) net realizable value.
• B) original cost.
• C) market value.
• D) net realizable value less a normal profit margin.

---

Definitions:

Monopolistic Competitors

Firms in a market structure where many companies sell products or services that are similar but not identical, allowing for competition based on quality, price, and branding.

Linear Demand Curve

A demand curve that shows a constant relationship between price and quantity demanded, typically resulting in a straight line when graphed.

Total Revenue

The overall amount of money generated by a business from selling its goods or services, without subtracting any costs.

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price, indicating how changes in price affect consumer demand or supply levels.