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Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item,
Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 20 Market Value per Unit Item Inventory Quantity Cost per Unit JFW1 SAW 103 194 $32 16 (Net Realizable Value) 134 14 Inventory Cost per Item Quantity Unit Market Value per Unit (Net Realizable Value) Cost Market Exhibit 10 Determining Inventory at Lower of Cost or Market (LCM) Lower of Cost or Market (LCM) Echo 400 $10.25 $9.50 $ 4,100 $ 3,800 $ 3,800 Foxtrot 120 22.50 24.10 (1) 2,700 2,892 2,700 Sierra 600 Applied 8.00 7.75 4,800 4,650 4,650 Individual Item Tango 280 14.00 14.75 3,920 4,130 3,920 by Item Total $15,520 $15,472 $15,070 Class 1: Echo 400 Foxtrot 120 20 $10.25 22.50 $9.50 24.10 $ 4,100 $3,800 Subtotal 2,700 $ 6,800 2,892 $ 6,692 $ 6,692 (2) Class 2: Applied Class by Class Sierra 600 8.00 Tango 280 14.00 7.75 14.75 $ 4,800 $ 4,650 3,920 4130 Subtotal 58,720 $8,780 8,720 Total $15,520 $15,472 $15,412 Echo 400 $10.25 $9.50 $ 4,100 $3,800 Foxtrot 120 22.50 24.10 2,700 2,892 Sierra 600 8.00 7.75 4,800 4,650 (3) Applied in Total Tango 280 14.00 14.75 3.920 4,130 Total $15.520 $15472 $15,472
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