A Hobe Sound inventory count finds 18 damaged units with replacement cost of $42 each. What inventory write-off should be recorded?
Correct Answer
A) $756
Inventory write-off equals damaged quantity multiplied by replacement cost per unit.
Why This Is the Correct Answer
Inventory write-off equals damaged quantity multiplied by replacement cost per unit.
Why the Other Options Are Wrong
Option B: $60
$60 is below the supported result for inventory write-off; it likely uses the wrong base, period, or account bucket.
Option C: $798
$798 is above the supported result for inventory write-off; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $378
$378 is below the supported result for inventory write-off; it likely uses the wrong base, period, or account bucket.
Memory Technique
Inventory drawer for Material Clerk: label write-off before counting dollars.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Builder's Guide to Accounting, Inventory records and material cost adjustments; verify the trade cost, production, or field-control rule before answering.
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