Company X has two categories of products: Category A, which includes Item 1 and Item 2, and Category B, which includes Item 3 and Item 4. Item 1, 2, 3, and 4 had costs of $1,200, $5,300, $6,000, and $1,700, respectively. They also had NRVs of $1,300, $4,800, $7,500, and $1,000, respectively. Which of the following is true