PE 7-5B Lower-of-cost-or-market method

On the basis of the following data, determine the value of the inventory at the lower of
cost or market. Apply lower of cost or market to each inventory item as shown in Exhibit 8.

Item Inventory Quantity Unit Cost Price Unit Market Price
MT22         1,500                      $ 7                      $ 4
WY09           900                       22                         25

Answer:
 A B C D E F G 1   Unit Unit Total 2  Inventory Cost Market   Lower 3 Commodity Quantity Price Price Cost Market of C or M 4 MT22  1,500  $  7 $  4  $10,500  $  6,000  $  6,000 5 WY09  900  22    25    19,800    22,500    19,800 6 Total     $30,300  $28,500  $25,800

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