A South Daytona inventory count finds 14 damaged units with replacement cost of $55 each. What inventory write-off should be recorded?
Correct Answer
C) $770
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 A: $69
$69 is below the supported result for inventory write-off; it likely uses the wrong base, period, or account bucket.
Option B: $825
$825 is above the supported result for inventory write-off; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $385
$385 is below the supported result for inventory write-off; it likely uses the wrong base, period, or account bucket.
Memory Technique
Write-Off and damaged live in different drawers; Material Clerk tells which opens.
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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