Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $36; selling price, $48; selling costs, $6. What unit value should Ross use when applying the lower of cost or net realizable value rule to ending inventory?

Unit value of $36 Ross should use when applying the lower of cost or net realizable value rule to ending inventory.

Explanation:

Inventory should be recorded on:

Lower of

Cost Net realizable value

Cost of product = $36 per unit

Net realizable value = selling price - selling cost = $48 - $6 = $42

So the lower value is the cost value of $36 for the product. So, this value should be used in order to determine the cost of ending inventory.