Question

Riegel Co uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at 12/31/17, consists of products D, E, F, G, H, and I. Relevant per unit data for these products are:

Item D Item E Item F Item G Item H Item I
Estimated selling price $120 $110 $95 $90 $110 $90
Cost 75 80 80 80 50 36
Cost to complete 30 30 25 35 30 30
Selling costs 10 18 10 20 10 20

Required:
Using the LCNRV rule, determine the proper unit value for the statement of financial position reporting purposes on December 31, 2014, for each of the inventory items above.

Answer 1

Riegel Co.

Item D Item E Item F Item G Item H Item I

LCNRV $105 $92 $85 $70 $80 $66

Step-by-step explanation:

a) Data and Calculations:

Item D Item E Item F Item G Item H Item I

Estimated selling price $120 $110 $95 $90 $110 $90

Cost 75 80 80 80 50 36

Cost to complete 30 30 25 35 30 30

Selling costs 10 18 10 20 10 20

Total costs:

Item D Item E Item F Item G Item H Item I

Cost 75 80 80 80 50 36

Cost to complete 30 30 25 35 30 30

Total costs 105 110 105 115 80 66

NRV:

Item D Item E Item F Item G Item H Item I

Estimated selling price $120 $110 $95 $90 $110 $90

Selling costs 10 18 10 20 10 20

NRV $110 $92 85 $70 $100 $70

Comparison of Total costs with NRV:

Item D Item E Item F Item G Item H Item I

NRV $110 $92 85 $70 $100 $70

Total costs 105 110 105 115 80 66

LCNRV $105 $92 $85 $70 $80 $66