Part Three: Problem

HCH Corporation sells copying machines and replacement toners. HCH Corporation sells two models Model A and Model B. HCH Corporation provided the following information regarding inventory at the end of the current year.

Item	Number of Units	Replacement Cost	Selling Price	Cost of Completion and Disposal	Normal Profit	Cost
Model A
Copying Machine	2,000	$155	$210	$20	$35	$170
Replacement Toner	1,500	40	55	10	16	48
Model B
Copying Machine	3,400	215	235	25	20	185
Replacement Toner	2,750	65	145	15	25	55

Instructions:

Calculate the ceiling and floor for each model for the lower of cost or market rule.

Item	Ceiling	Floor
Model A
Copying Machine
Replacement Toner
Model B
Copying Machine
Replacement Toner

HCH Corporation is pricing its ending inventory using the lower of cost or market but want to know the difference with the standard of lower of cost or net realizable value. Fill the following table with the unit values that HCH Corporation should use for each model under each rule.

Item	Inventory at lower of cost or market	Inventory at lower of cost or net realizable value
Model A
Copying Machine
Replacement Toner
Model B
Copying Machine
Replacement Toner