what is LCM ?

Lower-of-Cost-or-Market Lower-of- ost-or-Market Income Statement Loss Finished Desks Celling 450 (500-50) Sales 30a000 s 0,000 18,000168,000 45,000 20,000 20,000 Inventory cost Est. cost to manufacture Commissions and disposal costsSo Catalog seling price 470 460 Cost of goods sold Gross profit Operating axpenses: 500 General and administrative Total operating expenses Cost 460 Other revenue and (expense Cost 470 Market Loss on inventory 12,000) interest income Tetal other Floor 350 (450-.500 x 20%) Income from operalions 108,000 32,40032 400 Income tax expense LCM 7500 75 400 Net income LOT 915 Lower-of-Cost-or-Market Lower-of-Cost-or-Market Ilustration: Remmers Company manufactures desks. The company attempts to obtain a 20% goss margn on seling price. At December 31 2014, the following finished desks appear in the company's inventory Finished Desiks Ceiling 480 (540 60) Inventory cost Est, cost to manufacture Commissions and disposal costs6 Catalog selling price $ 450 430 8450 $480 00 $1060 47040 830 400 430 610 100 540 506080130 500 540 9001,200 Replacement Cost 430 205 catalog selling price Costs 450 | | Market s The 2014 catalog was in effect through catalog is effective as of December 1. 2015. Instructions: At what amount should each of the four desks appear in the company's December 31 2015, inventory, assuming that the company has adopted a lower-of-FIFO-cost-or-market approach for valuation of nventories on an individual-item basis? 2014, and the 2015 Floor 372 ( 480-540 x 20%) 4