Question

1. Lower-of-Cost-or-Market Inventory

   On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.

   Product	Inventory Quantity	Cost Per Unit	Market Value per Unit (Net Realizable Value)
   Class 1:
   Model A	19	$299	$295
   Model B	23	78	86
   Model C	44	237	241
   Class 2:
   Model D	9	78	83
   Model E	9	244	228

   a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.

   Inventory at the Lower of Cost or Market
   Product	Inventory Quantity	Cost per Unit	Market Value per Unit (Net Realizable Value)	Cost	Market	Lower of Cost or Market
   Model A		$	$	$	$	$
   Model B
   Model C
   Model D
   Model E
   Total				$	$	$

   b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.

   Inventory at the Lower of Cost or Market
   Product	Inventory Quantity	Cost per Unit	Market Value per Unit (Net Realizable Value)	Cost	Market	Lower of Cost or Market
   Class 1:
   Model A		$	$	$	$
   Model B
   Model C
   Subtotal				$	$	$
   Class 2:
   Model D				$	$
   Model E
   Subtotal				$	$
   Total				$	$	$

   c. Determine the value of the inventory at the lower of cost or market applied to total inventory.

   Inventory at the Lower of Cost or Market
   Product	Inventory Quantity	Cost per Unit	Market Value per Unit (Net Realizable Value)	Cost	Market	Lower of Cost or Market
   Model A		$	$	$	$
   Model B
   Model C
   Model D
   Model E
   Total				$	$	$

Check My Work

Answer 1

Req a.
Product	Qy	CPU	MV per unit	Total cost	Total MV	LCM
Class1:
ModelA	19	299	295	5681	5605	5605
Model B	23	78	86	1794	1978	1794
Model C	44	237	241	10428	10604	10428
Class2:
Model D	9	78	83	702	747	702
Model E	9	244	238	2196	2142	2142
Total				20801	21076	20671
Inventory valuation: $ 20671
Req b.
Product	Qy	CPU	MV per unit	Total cost	Total MV	LCM
Class1:
ModelA	19	299	295	5681	5605
Model B	23	78	86	1794	1978
Model C	44	237	241	10428	10604
Sub total				17903	18187	17903
Class2:
Model D	9	78	83	702	747
Model E	9	244	238	2196	2142
Sub total				2898	2889	2889
Total				20801	21076	20792
Inventory valuation: $ 20792
Req c.
Product	Qy	CPU	MV per unit	Total cost	Total MV	LCM
Class1:
ModelA	19	299	295	5681	5605
Model B	23	78	86	1794	1978
Model C	44	237	241	10428	10604
Class2:
Model D	9	78	83	702	747
Model E	9	244	238	2196	2142
Total				20801	21076	20801
Inventory valuation: $ 20801