Question

The inventory of Oheto Company on December 31, 2017, consists of the following items.

Answer 1

Answer:

a. $335,100

b. $341,300

Explanation:

The computation is shown below:

         (A)             (B)                      (C)       (A × B)          (A × C)

Part  Quantity  Cost per Unit   NRV    Total cost    Total NRV   Lower value

110    600          95                      100       $57,000       $60,000     $57,000

111     1000         60                      52        $60,000       $52,000   $52,000

112    500          80                      76         $40,000       $38,000   $38,000

113    200          170                     180       $34,000        $36,000   $34,000

120   400          205                   208       $82,000        $83,200   $82,000

121a  1600         16                      1             $25,600        $1,600   $1,600

122   300          240                   235       $72,000 $70,500   $70,500

Total                                                         $370,600 $341,300  $335,100

So

a. Under the  LCNRV method, the inventory to each item would be $335,100

b. The total inventory would be $341,300