Final answer:
In applying Lower-of-Cost-or-Market, the designated market value is the lower of the cost or the market value.
Step-by-step explanation:
In applying Lower-of-Cost-or-Market, the designated market value is the lower of the cost or the market value. It is used to determine the value at which inventory should be reported on a company's balance sheet.
For example, let's say a company has 100 units of a particular product in inventory. The cost to produce each unit is $10, but the market value of each unit has decreased to $8 due to a decrease in demand. In this case, the designated market value would be $8, and the company should report the value of their inventory as 100 * $8 = $800 on their balance sheet.