Question
A company is analyzing its inventory and wants to apply the lower-of-cost-or-market rule to the value of its inventory given below: Product Cost Replacement Costs
A company is analyzing its inventory and wants to apply the lower-of-cost-or-market rule to the value of its inventory given below:
| Product | Cost | Replacement Costs | Net Realizable Value | Net Realizable Value Less a Normal Profit Margin |
| Group 1 | ||||
| A | $10,000 | $12,000 | $15,000 | $13,000 |
| B | $15,000 | $13,000 | $15,000 | $12,000 |
| Group 2 | ||||
| C | $5,000 | $6,000 | $4,000 | $3,000 |
| D | $6,000 | $3,000 | $5,000 | $4,000 |
What is the inventory adjustment for the period assuming this company applies the lower-of-cost-or-market rule to the total amount of inventoy?
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ISE Fundamentals Of Cost Accounting
Authors: William N. Lanen, Shannon Anderson, Michael W. Maher
6th Edition
1260569098, 9781260569094
