Questions for a carpentry business. Building houses and such. also selling merchidise that says the same of the company.

1. Explain how the Lower of Cost or Market Rule (LCM) would apply to your specific business.

2. How does The Consistency Principle apply to your inventory costing methods?

3. Which inventory costing method is ideal for tax purposes? Why?

4. Why might you need to estimate the value of your inventory? Explain one way to do it.