Ames Trading Company has the following products in its ending inventory. Product Quantity Cost per Unit Market per Unit Mountain

Question

2 years ago

6

bikes 15 $ 720 $ 660 Skateboards 30 200 270 Gliders 24 770 720 Compute lower of cost or market for inventory applied separately to each product.

1 answer:

andre [41] · Answer 1 · 2023-02-21T07:35:08+03:00

The total Lower of Cost or Market is $38870.

<h3><u>What is Lower of Cost or Market?</u></h3>

Companies using U.S. GAAP must value their inventories using the lower of cost or market (LCM) technique.
The lower of the original cost or market value is used to value inventory in the lower of cost or market approach, as the name suggests.

We have,

Mountain Bikes: 15 units, cost: $710, market: $660, total cost: $10,650, total market: $9900, LCM: $9900

Skateboards: 20 units, cost: $260, market: $290, total cost: $7800, total market: $8700, LCM: $7800

Gliders: 29 units, cost: $810, market: $730, total cost: $23490, total market: $21170, LCM: $21170

Total cost: $41940

Total market: $39770

Total LCM: $38870

Learn more about Lower of cost or market with the help of the given link:

#SPJ4