Question

reative Technology reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Inventory Quantity Unit Cost NRV Optima cameras 120 $ 47 $ 77 Inspire speakers 30 57 47 Calculate the total amount to be reported for ending inventory.

Answer 1

$7,050

Step-by-step explanation:

The computation of the total amount reported for ending inventory is shown below:

Quantity units Cost NRV Lower of Cost or NRV

120 $47 $77 $47

30 $57 $47 $47

Now as we can see we pick up the lower value as the inventory should be recording by taking lower value of cost or NRV

So, the ending inventory is

= 120 units ×$47 + 30 units × $47

= $5,640 + $1,410

= $7,050

For ending inventory we simply multiplying the units with its lower cost or NRV basis