Question

Using the lower of cost or market, what should the total inventory value be for the following items: Item Quantity Unit Cost Price Unit Market Price Total Cost Price Total Market Price Lower of Cost or Market A 201 $7 $11 $1,407 $2,211 $ B 98 17 15 1,666 1,470 C 71 23 26 1,633 1,846 $

Answer 1

Answer:

$4,706

Explanation:

The computation is shown below:

As we know that the inventory should be valued at lower of cost or market value which is shown below:

Tota cost price for all markets is

= Market A + Market B + market C

= $1,407 + $1,666 + $1,633

= $4,706

And, the total market price for all markets is

= Market A + Market B + market C

= $2,211 + $1,470 + $1,846

= $5,527

So based on the above calculation, the cost price should be lower off and the same is to be considered