PE 7-6A Lower-of-cost-or-market method

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item, as shown in Exhibit 9.


Item
Inventory
Quantity
Unit
Cost Price
Unit
Market Price
1107B 450 $80 $78
1110M 75 60 64


Answer:

Commodity
Inventory
Quantity
Unit
Cost
Price
Unit
Market
Price
Total
Cost Market
Lower of
C or M
1107B 450 $80 $78 $36,000 $35,100 $35,100
1110M 75 60 64 4,500 4,800 4,500
Total $40,500 $39,900 $39,600