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Sheridan Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 25% on
Sheridan 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 | $22 | $43 |
Replacement cost | 14 | 24 |
Estimated cost to dispose | 19 | 21 |
Estimated selling price | 44 | 68 |
In pricing its ending inventory using the lower-of-cost-or-market, what unit values, rounded to the nearest dollar, should Sheridan use for products #1 and #2, respectively?
a. $24 and $30.
b. $24 and $25.
c. $14 and $24.
d. $14 and $30.
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