Question
Crane Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 25% on
Crane Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 25% on selling price is considered normal for each product. Specific data with respect to each product follows: Product #1 Product #2 Historical cost $6 $11 Replacement cost 6 8 Estimated cost to dispose 3 5 Estimated selling price 12 20 In pricing its ending inventory using the lower-of-cost-or-market, what unit values, rounded to the nearest dollar, should Crane use for products #1 and #2, respectively?
$6 and $10
. $8 and $10.
$8 and $9.
$6 and $8.
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