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SLR Corporation has 1,400 units of each of its two products in its year-end inventory. Per unit data for each of the products are as
SLR Corporation has 1,400 units of each of its two products in its year-end inventory. Per unit data for each of the products are as follows:
| Product 1 | Product 2 | |
|---|---|---|
| Cost | $ 62 | $ 46 |
| Replacement cost | 60 | 38 |
| Selling price | 82 | 48 |
| Selling costs | 18 | 4 |
| Normal profit | 22 | 8 |
Determine the carrying value of SLRs inventory assuming that the lower of cost or market (LCM) rule is applied to individual products. What is the before-tax income effect of the LCM adjustment?
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