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LCM/NRV is applied when the market value (often defined as current replacement cost) or net realizable value is lower than the cost of the available units. The LCM/NRV requirement to write down the closing inventory from cost to market/net realizable value has the immediate effect of reducing (a) net income and (b) the amount of inventory carried on the balance sheet.
Low or market price rules are typically applied to specific inventory items, but can also be applied to entire inventory categories. In the latter case, LCM adjustments can be avoided if there is a balance within the inventory category for items whose market value is below cost and above cost.
Low Cost or Market Value (often abbreviated as LCM) is an accounting method of valuing inventory. We assign a value to inventory at the cost of replacement in the market or the amount recorded when originally purchased, whichever is lower.
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Wholesaling are conditional middle men they buy large bulk's from manufactures, most of the time with their own transportation their niche's and they sell and deliver in smaller quantities to retailers and charge more per unit.