On the basis of the data shown below Inventory Cost per Mark

On the basis of the data shown below Inventory Cost per Market Value per Unit Item Quantity Unt (Net Realizable Value) A13Y vz31 131 62 $35 $38 18 14 Determine the value of the inventory at the lower-of-cost-or-market by applying lower of-cost-or-market to each inventory item, as shown in Exhibit 9.

Solution

1) Determine value of inventory :

Value of inventory under lower of cost or market value = $4004

2a) Weighted unit cost = (30*400+120*450)/150 = 440 per unit

2b) Cost of merchandise sold = 110*440 = $48400

2c) Ending inventory = 40*440 = $17600

	Quantity	Cost	Market value	value under LCm
A13Y	62	35	38	62*35 = 2170
VZ31	131	18	14	131*14 = 1834
Total				4004