A: Mortenson Corporation sells its product, a rare metal, in a controlled market with a quoted price applicable to all quantities. The total cost of 5,000 pounds of the metal now held in inventory is $200,000. The total selling price is $560,000, and estimated costs of disposal are $20,000. At what amount should the inventory of 5,000 pounds be reported in the balance sheet?

a. $180,000.

b. $200,000.

c. $540,000.

d. $560,000.

B: Mortenson Corporation acquired two inventory items at a lump-sum cost of $120,000. The acquisition included 3,000 units of product LF, and 7,000 units of product 1B. LF normally sells for $30 per unit, and 1B for $10 per unit. If Turner sells 1,000 units of LF, what amount of gross profit should it recognize?

a. $2,500

b. $7,500.

c. $20,000.

d. $24,500.

Please show/explain your work/formula for BOTH parts to get a thumbs-up.