26

1. ACME Companypurchases for resale 1,000widgets for $47 each. At year end, thereplacement costis $39 per widget, the estimated selling price is$65 per widget, the disposal cost is$10 per widget, and the estimated markup is$15 per widget. IfACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet?
2. $55,000
3. $39,000
4. $40,000
5. $43,000
6. $47,000

2 points

QUESTION 27

1. Which of the following statements is false?
2. If thereplacement costdoes not exceed the ceiling and is not lower than the floor, there is no need to apply LCM.
3. If the replacement cost is higher than the ceiling, you must use the ceiling for the market value.
4. If the replacement cost is lower than the floor, you must use the floor for the market value.
5. If the replacement cost does not exceed the ceiling and is not lower than the floor, you must use the replacement cost for market value.
6. All of these statements are true.

2 points

QUESTION 28

1. UpCo's inventory data is as follows:
3. Cases on hand
4. Cost per case
5. Market per case
6. Garden Supplies
10. Snail Bait
11. 35
12. $80
13. $75
14. Isotox
15. 12
16. 20
17. 23
18. Shovels
19. 20
20. 100
21. 99
22. Hardware
26. Screws
27. 20
28. $80
29. $96
30. Brackets
31. 2
32. 35
33. 31
34. Nails
35. 8
36. 12
37. 12
38. Paint
42. Enamel -1 gal.
43. 22
44. $120
45. $118
46. Spray Cans
47. 15
48. 45
49. 54
50. Misc. Brushes
51. 4
52. 30
53. 38
55. Calculate LCM by total inventory:
56. $10,517
57. $9,994
58. $10,241
59. $10,378
60. $10,082

2 points

QUESTION 29

1. Your company has not yet decided how it will apply LCM to its inventory. If management wants to minimize the value of ending inventory, it should:
2. apply LCM by item.
3. apply LCM by group, or "by class."
4. apply LCM to total inventory.
5. apply LCM usingany one of the above methodsbecause LCM does not affect the value of inventory.

2 points

QUESTION 30

1. ACME Companypurchases for resale 1,000widgets for $78 each. At year end, thereplacement costis $80 per widget, the estimated selling price is$94 per widget, the disposal cost is$9 per widget, and the estimated markup is$12 per widget. IfACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet?
2. $79,000
3. $78,000
4. $73,000
5. $80,000
6. $85,000