Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $16,325. Information about its inventory items follows:

Product Line	Quantity on Hand			Unit Cost When Acquired (FIFO)			Value at Year-End
Air Flow		40		$	75		$	81
Blister Buster		85			60			56
Coolonite		40			25			18
Dudesly		85			85			88

Required:

1. Compute the LCM/NRV write-down per unit and in total for each item in the table. Also compute the total overall write-down for all items.
2. How will the write-down of inventory to lower of cost or market/net realizable value affect the companys expenses reported for the year ended December 31?
3. Compute the amount that should be reported for the inventory on December 31, after the LCM/NRV rule has been applied to each item.