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Blossom Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on
Blossom Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows:
Product #1 | Product #2 | |
Historical cost | $8 | $19 |
Replacement cost | 12 | 12 |
Estimated cost to dispose | 2 | 5 |
Estimated selling price | 21 | 33 |
In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Blossom use for products #1 and #2, respectively?
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