Question 2.

We have the inventories at the end of this year. The following table provide information about each product.

Product Cost Replacement Cost Selling Price

101 $135 $130 $140

202 $150 $145 $160

303 $115 $117 $120

We expect to incur selling costs equal to 5 percent of the selling price on each of the products.

How much is the total amount of inventories at the end of this year?

1. $390
2. $392
3. $395
4. $397
5. $400