1. Assume Yellow Company uses the lower of cost or market (LCM) and has two products in its inventory. The normal profit margin is 25% of Total Cost. Information about the December 31, 2021, inventory is as follows:

   Product	Total Cost	Total Replacement Cost	Total Net Realizable Value
   101	120,000	98,000	100,000
   102	90,000	100,000	110,000

   Assume Yellow applies LCM at the product-level. How much should Yellow write down inventory on December 31, 2021?

   	a.	$ 0
   	b.	$ 18,000
   	c.	$ 12,000
   	d.	$ 22,000
   	e.	None of the options