Part One

Taylor Tools uses the lower$-$of$-$cost$-$or$-$NRV method to value its inventory. Taylor Tools has reviewed the information for the sanders that it is currently manufacturing and believes the following is true:

Sales Value once Completed $$16,000$

Current Manufacturing Cost of Incomplete Inventory $11,000$

Estimated Cost of Completion $4,000$

Estimated Selling Costs to be Incurred $1,500$

Compute the net realizable value of Taylor Tools' sanders.

Inventory Value$-$Unfinished

Less: Estimated Cost of Completion

Estimated Selling Costs

Net Realizable Value