Management has adopted a policy of reporting its unsold inventory at the end of each year at

the lower of LIFO cost or the estimated selling price of that inventory in the next year. Which

of the following statements is correct?

A$)$ Management's policy is acceptable.

B$)$ Management should instead choose the higher of the two amounts to report inventory.

C$)$ Management also needs to consider the inventory's replacement cost.

D$)$ Management should instead report inventory at the lower of cost or the most recent

selling price in the current year.

In applying LCM, market cannot be:

A$)$ Less than net realizable value.

B$)$ Greater than the normal profit.

C$)$ Less than the normal profit margin.

D$)$ Greater than net realizable value.

Data related to the inventories of Mountain Ski Equipment and Supplies is presented below:

Normal gross

profit ratio

In applying the lower of cost or market rule, the inventory of boots would be valued at:

A$)$ $$135,500.$

B$)$ $$130,500.$

C$)$ $$93,000.$

D$)$ $$139,500.$