Lower of Cost or Market Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net realizable value of $300, a normal profit margin of $35, and a current replacement cost of $250. Determine the amount per unit that should be used as the market value to apply the lower of cost or market rule to determine Black’s ending inventory.

$265

Explanation:

The computation of Net realizable value-normal profit margin by using the lower of cost or market rule is shown below:-

Amount per unit = Net realizable value or Ceiling - Normal profit margin

= $300 - $35

= $265

Therefore for computing the amount per unit we simply applied the above formula i.e by deducting the normal profit margin from the net realizable value so that the amount per unit could come

step 1: create a plan

step 2: inventory facility equipment/assets

step 3: create preventive maintenance procedures

step 4: create preventive maintenance schedules

step 5: train your maintenanceteam

step 6: analyze – adjust - improve

or

step 1 – pm procedure design: doing the effective things

step 2 – pm procedure scheduling: efficient use of people and resources

step 3 – pm lubrication engineering

step 4 – pm training: back on the chain gang

step 5 – pm program management plan

step 6 – communicate, communicate, communicate