Question

Apogee group purchases for resale 2,000 calculators for $16 each. at year end, the estimated selling price is $21 and the disposal cost is $2. if apogee uses lcnrv, on a per-unit basis, what is the net realizable value?

a. $21
b. $19
c. $17
d. $15

Answer 1

To calculate the net realizable value on a per-unit basis using LCNRV (Lower of Cost or Net Realizable Value), we need to compare the cost of the calculators to the estimated selling price minus the disposal cost. In this case, the net realizable value per unit is $19.

"The correct option is approximately option B"

Step-by-step explanation:

To calculate the net realizable value on a per-unit basis using LCNRV (Lower of Cost or Net Realizable Value), we need to compare the cost of the calculators to the estimated selling price minus the disposal cost.

Calculators purchased: 2,000

Cost per calculator: $16

Estimated selling price: $21

Disposal cost: $2

Step 1: Calculate the total cost of the calculators purchased:

Total cost = 2,000 units x $16 = $32,000

Step 2: Calculate the net realizable value per unit:

Net realizable value = Estimated selling price - Disposal cost

Net realizable value = $21 - $2 = $19

Step 3: Calculate the net realizable value for the total quantity:

Net realizable value = Net realizable value per unit x Quantity

Net realizable value = $19 x 2,000 = $38,000

Therefore, the net realizable value on a per-unit basis is $19.