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 10. Item Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) JFW1 139 $57 SAW9 293 28 $54 32 x Feedback Check My Work Under lower-of-cost-or-market, for each item in inventory, choose the lower of total cost price or the total market price as the assigned value for computing inventory cost. First you must compute the total cost and total market for each item. Exhibit 10 Determining Inventory at Lower of Cost or Market (LCM) Inventory Cost per Item Quantity Unit Market Value per Unit (Net Realizable Value) Lower of Cost or Market Cost Market (LCM) Echo 400 $10.25 $9.50 $ 4,100 $ 3,800 $ 3,800 (1) Foxtrot 120 22.50 24.10 2,700 2,892 2,700 Applied Sierra 600 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 $10.25 $ 9.50 $ 4,100 $ 3,800 Foxtrot 120 22.50 24.10 Subtotal 2,700 $ 6,800 2,892 $ 6,692 $ 6,692 Class 2: (2) Applied Class by Class Sierra 600 8.00 Tango 280 14.00 7.75 14.75 $ 4,800 3,920 Subtotal Total $ 8,720 $15,520 $ 4,650 4,130 $ 8,780 $15,472 8,720 $15,412 Echo 400 $10.25 Foxtrot 120 22.50 $ 9.50 24.10 $ 4,100 $ 3,800 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 $15,472 $15,472