Question

Nelson Corporation sells three different products.The following information is available on December 31: Ch6_Q150 When applying the lower of cost or market rule to each item, what will Nelson's total ending inventory balance be? $6,900 $6,450 $7,950 $6,600

Answer 1

$6,450

Step-by-step explanation:

The computation of the ending inventory balance using the lower of cost or market rule to each item is shown below:

Items Cost Market value Lower cost Units Cost

per unit per unit per unit

X $4 $3.50 $3.50 300 $1,050

Y $2 $1.50 $1.50 600 $900

Z $3 $4 $3 1,500 $4,500

Total ending inventory balance $6,450