Final answer:
The value of the inventory at the lower of cost or market, assuming LCM is applied individually to each item, is $146.
Using the Lower of Cost or Market method, the inventory value for Item S is $90 and for Item T is $56, totaling $146 for both items combined, which is option a.
Step-by-step explanation:
The lower of cost or market (LCM) method is used to value inventory when the market value is lower than the cost. To determine the value of the inventory at the lower of cost or market, we need to compare the cost per unit and the market value per unit for each item individually.
For item S, the market value is $30, which is lower than the cost of $34. So, we take the market value of $30 and multiply it by the quantity of 3 to get $90.
For item T, the market value is $30, which is equal to the cost of $28. So, we take the cost of $28 and multiply it by the quantity of 2 to get $56.
Finally, we add the values of item S and item T together to calculate the total value of the inventory at the lower of cost or market: $90 + $56 = $146.