A company incurred the following costs related to the production of inventory in the current year: 1 Cost of materials Cost of direct labor Allocation of variable overhead costs Allocation of fixed overhead costs (based on normal production levels) Storage costs (after production, prior to sale) Selling costs $100,000 60,000 30,000 25,000 2,000 8,000 The cost of materials included abnormal waste of $10,000. What is the cost of inventory in the current year? Multiple Choice $190,000 $205,000 O $215,000 O $217,000 A company determined the following values for its inventory as of the end of its fiscal year: 2 Historical cost Current replacement cost Net realizable value Net realizable value less a normal profit margin Fair value $50,000 35,000 45,000 40,000 48,000 What amount should the company report for inventory on its balance sheet? Multiple Choice $35.000 $40,000 $45.000 a O $48,000 When an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct? 3 Multiple Choice When an asset is revalued, the entire class of property, plant, and equipment to which that asset belongs must be revalued. O When an asset is revalued, Individual assets within a class of property, plant, and equipment to which that asset belongs may be selectively revalued. O O Revaluations of property, plant, and equipment must be made at least every three years. Increases in an asset's carrying value as a result of the first revaluation must be recognized In net Income. 4 On January 1, Year 1, an entity acquires a new machine with an estimated useful life of 20 years for $100,000. The machine has an electrical motor that must be replaced every five years at an estimated cost of $20,000. Continued operation of the machine requires an inspection every four years after purchase; the inspection cost is $10,000. The company uses the straight-line method of depreciation. What is the depreciation expense for Year 1? Multiple Choice O O $5,000 O O $5,500 o $8,000 O O $10,000 An asset is considered to be impaired when its carrying amount is greater than its 5 Multiple Choice Net selling price. O Value in use. o Undiscounted future cash flows. O Recoverable amount