Selling price Cost Replacement cost Costs to sell Normal gross profit ratio Surgical Equipment $285 195 265 40 40% Surgical Supplies $145 115 105 10 408 Rehab Equipment $365 275 260 30 40% Rehab Supplies $190 187 183 20 408 In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at: Multiple Choice $95 $125. $115 $105