E9-1 (Lower-of-Cost-or-Market) The inventory of 3T Company on December 31, 2014, consists of the following items.

Part No. Quantity Cost per Unit Cost to Replace per Unit

110 600 $ 90 $100

111 1,000 60 52

112 500 80 76

113 200 170 180

120 400 205 208

121a 1,600 16 14

122 300 240 235

Part No. 121 is obsolete and has a realizable value of $0.20 each as scrap.

Instructions

(a)Determine the inventory as of December 31, 2014, by the lower-of-cost-or-market method, applying this method directly to each item.

(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.