Question

Lower-of-Cost-or-Market Inventory

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9.

Inventory Item	Inventory Quantity	Cost per Unit	Market Value per Unit (Net Realizable Value)
Birch	44	$71	$47
Cypress	38	207	232
Mountain Ash	32	44	36
Spruce	25	223	198
Willow	24	254	238

Inventory at the Lower of Cost or Market
Commodity	Total Cost	Total Market	Total Lower of C or M
Birch	$	$	$
Cypress
Mountain Ash
Spruce
Willow
Total	$	$	$

Answer 1

	Inventory at the lower of cost or market
Commodity	Total Cost	Total market	Total lower of C and M
Birch	3124	$2,068	$2,068
Cypress	7866	8816	7866
Mountain Ash	1408	1152	1152
Spruce	5575	4950	4950
Willow	6096	5712	5712
Total	24069	$22,698	$21,748
	Calculation of Total Cost
Commodity	Inventory Quantity (A)	Cost Per Unit (B)	Total Cost (A*B)
Birch	44	$71	$3,124
Cypress	38	207	7866
Mountain Ash	32	44	1408
Spruce	25	223	5575
Willow	24	254	6096
	Calculation of Total Market Cost
Commodity	Inventory Quantity (A)	Market value Per unit (B)	Total market (A*B)
Birch	44	$47	$2,068
Cypress	38	232	8816
Mountain Ash	32	36	1152
Spruce	25	198	4950
Willow	24	238	5712