Question

Football teams ending inventory includes the following items

product	units	cost per unit	market per unit
caps	200	$15	$22
travel Jerseys	55	$40	$125
windbreakers	18	$60	$85
signature stadium cushions	500	$20	$10

Compute the lower of cost or market for the ending inventory separately for each product.

		per unit	per unit	total inventory	total inventory
inventory items	units	cost	market	cost	market	LCM Applied to individual items
caps
travel jerseys
windbreakers
signature stadium cushion

Answer 1

The total ending Inventory cost is value at lower of cost or Net realisable value. This allocation is based on for each Individual units and component of Inventory rather than inventory in total.

Based on the information given, the calculation of Ending Inventory will be as follows:

Inventory Items	Units	Per unit cost	Per unit Market price	Total Inventory at cost	Total Inventory at market price	Ending Inventory value - Lower of cost or market value
Caps	200	$          15	$            22	$       3,000	$          4,400	$ 3,000
Travel Jerseys	55	$          40	$         125	$       2,200	$          6,875	$ 2,200
Windbreakers	18	$          60	$            85	$       1,080	$          1,530	$ 1,080
Signature stadium cushions	500	$          20	$            10	$     10,000	$          5,000	$ 5,000
Total	773			$     16,280	$       17,805	$ 11,280