Herman Company has three products in its ending inventory. Specific per unit data for each of the products are as follows:

Product1 product2 product3
cost $20 $90 $50
replacement
cost 18 85 40
selling price 40 120 70
disposal costs 6 40 10
normal profit
margin 5 30 12

What unit values should Herman use for each of its products when applying the LCM rule to ending inventory?

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To determine the unit values Herman should use for each product when applying the Lower of Cost or Market (LCM) rule to ending inventory, we need to compare the cost and market values of each product and select the lower value for each.

The lower value for each product can be calculated as follows:

1. Product 1:
- Cost: $20
- Market Value: $18 (replacement cost)
- Lower of Cost or Market: $18

2. Product 2:
- Cost: $90
- Market Value: $85 (replacement cost)
- Lower of Cost or Market: $85

3. Product 3:
- Cost: $50
- Market Value: $40 (replacement cost)
- Lower of Cost or Market: $40

Therefore, the unit values that Herman should use for each product when applying the LCM rule to ending inventory are as follows:

- Product 1: $18
- Product 2: $85
- Product 3: $40

To determine the unit values to be used for each product when applying the LCM (Lower of Cost or Market) rule to ending inventory, you need to compare the cost and market values for each product and choose the lower of the two values.

Here's how you can do it for each product:

1. Product 1:
- Cost: $20
- Replacement cost: $18
- Selling price: $40
- Disposal costs: $6
- Normal profit margin: $5

To determine the unit value for Product 1, you need to compare the cost and replacement cost. Since the replacement cost of $18 is lower than the cost of $20, you should use the replacement cost.

Unit value for Product 1 = $18

2. Product 2:
- Cost: $90
- Replacement cost: $85
- Selling price: $120
- Disposal costs: $40
- Normal profit margin: $30

To determine the unit value for Product 2, compare the cost and replacement cost. Since the replacement cost of $85 is lower than the cost of $90, you should use the replacement cost.

Unit value for Product 2 = $85

3. Product 3:
- Cost: $50
- Replacement cost: $40
- Selling price: $70
- Disposal costs: $10
- Normal profit margin: $12

To determine the unit value for Product 3, compare the cost and replacement cost. Since the replacement cost of $40 is lower than the cost of $50, you should use the replacement cost.

Unit value for Product 3 = $40

Therefore, the unit values that Herman Company should use for each of its products when applying the LCM rule to ending inventory are:

Product 1: $18
Product 2: $85
Product 3: $40