Marr Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows: Product Product 2 Historical cost Replacement cost Estimated cost to complete/dispose Estimated selling price $40 45 10 80 $70 54 26 130 In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Marr use for products #1 and #2, respectively? a. $40.00 and $60.00 b. $46.00 and $65.00 c. $40.00 and $65.00 d. $45.00 and $54.00

A3

Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net realizable value of $300, a normal profit margin of $35, and a current replacement cost of $250. Determine the amount per unit that should be used as the market value to apply the lower of cost or market rule to determine Black’s ending inventory.

Blake Company purchased two identical inventory items. The item purchased first cost $27.00, and the item purchased second cost $28.00. Blake sold one of the items for $50.00. Which of the following statements is true? Multiple Choice O The dollar amount assigned to ending inventory will be the same matter which inventory cost flow method is used. Cost of goods sold will be higher if Blake uses the FIFO rather than the weighted-average inventory cost flow method. Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method. Gross margin will be higher if Blake uses LIFO rather than the FIFO inventory cost flow method.

Jenks Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizabl e-value(LCNRV) basis in valuing inventories: Product Cost NRV A $114,000 $120,000 B 80,000 76,000 C 160,000 162,000 After Jenks applies the LCNRV rule, the value of the inventory reported on the balance sheet would be

Windsor Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records as of December 31, 2025. Replacement Item Quantity Unit Cost Cost/Unit Estimated Selling Price/Unit Completion & Disposal Cost/Unit Normal Profit Margin/Unit A 1,400 $8.85 $9.91 $12.39 $1.77 $2.12 B 1,100 9.68 9.32 11.09 1.06 1.42 C 1,300 6.61 6.37 8.50 1.36 0.71 D 1,300 4.48 4.96 7.43 0.94 1.77 1,700 7.55 7.43 7.91 0.83 1.18 Greg Forda is an accounting clerk in the accounting department of Windsor Co., and he cannot understand why the market value keeps changing from replacement cost to net realizable value to something that he cannot even figure out. Greg is very confused, and he is the one who records inventory purchases and calculates ending inventory. You are the manager of the department and an accountant.

None

Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2021 year-end inventory is as follows:   Inventory,                                                                                            Per Unit By Product Category                                        Quantity                Cost                     Market Furniture: Chairs                                                                       40                      $40                        $   46 Desks                                                                       20                         88                              73 Tables                                                                      60                         99                            107 Accessories:  Rugs                                                                        30                         75                               63  Lamps…

Question - Company sells three different categories of tools (small, medium, and large). The cost and market value of its inventory of tools is as follows. Cost Market Value Small $ 63,200 $ 72,000 Medium 2,89,400 2,60,800 Large 1,52,100 1,72,800 Determine the value of the company's inventory under the lower-of- cost-or-market value approach.

Smith Company's inventory cost is $100. The expected sales price is $110, estimated selling costs are $6. The normal gross profit ratio is 20% of selling price. The replacement cost of the inventory is $95. Smith Company uses the LIFO inventory method so must use the lower of cost or market approach and this inventory item should be valued at Correct answer came back as $95, Id love an explanation for this.   Thank you!