The following data concerns inventory at Eddy’s Boat & Bike Shop:

INSTRUCTIONS
Determine the amount that the company should report as the inventory valuation at cost or net realizable value, whichever is lower. Use each of the following three valuation methods:
1. Lower of cost or net realizable value for each item separately.
2. Lower of total cost or total net realizable value.
3. Lower of total cost or total net realizable value by group.

Analyze: Which valuation method will yield the highest net income?

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Motor Bike Department Model 705 Model 766 Model 815 Boat Department Model BX12 Model BX14 Model BX16 Quantity 64 104 52 36 32 28 Unit Cost $ 9,850 10,325 12,600 5,400 7,250 5,220 Net Realizable Value $ 9,675 11,350 12,750 5,500 6,990 5,325