Sheridan Corporation has two products in its ending inventory, each accounted for at the lower...
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Accounting
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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