Question

Using the lower of cost or market, what should the total inventory value be for the following items: Item Inventory Quantity Cost per Unit Market Value per Unit Total Cost Price Total Market Price Lower of Cost or Market A 220 $7 $11 $1,540 $2,420 $ B 101 $18 $15 $1,818 $1,515 $ C 62 $20 $23 $1,240 $1,426 $ $. Apply the lower-of-cost-or-market method to inventory as a whole.

Answer 1

$4,598

Step-by-step explanation:

As we know that

The inventory should be recognized at lower of cost or market value and the same is to be shown in the balance sheet

Total cost of all products

= $1,540 + $1,818 + $1,240

= $4,598

And, the total market value of all products

= $2,420 + $1,515 + $1,426

= $5,361

Based on this, as we can see that the total cost contains the lower value so the same is to be recorded i.e $,4598