LLLLLS If the market is lower than the purchase cost, the lower-of-cost-or-market (LCM) method is used inventory. Market, as used in lower of cost or market, is the net realizable value of the inventory. Net relizable value = Estimated Selling Price - Direct Cost of Disposal Lower-of-Cost-or-Market Inventory On the basis of the following data: Inventory Cost per Market Value per Unit Product Quantity Unit (Net Realizable Value) S158 Model A Model B 276 Model C 68 Model D 113 115 Model E 149 Determine the value of the inventory at the lower of cost or market. $143 270 89 Inventory at the Lower of Cost or Market Product Total Cost $2288 Total Market Lower of Total Cost or Total Market 2528 5 2288 3129 2793 2793 Effect of Inventory Errors on the Financial Statements Inventory errors often arise from consigned inventory. Manufacturers sometimes ship merchandi retailers who act as the manufacturer's selling agent. The manufacturer, called the consigner, reta