Question

Exercise 9-7

Metlock Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

Item No.		Quantity			Cost per Unit			Cost to Replace			Estimated Selling Price			Cost of Completion and Disposal			Normal Profit
1320		1,500			$3.90			$3.66			$5.49			$0.43			$1.53
1333		1,200			3.29			2.81			4.27			0.61			0.61
1426		1,100			5.49			4.51			6.10			0.49			1.22
1437		1,300			4.39			3.78			3.90			0.31			1.10
1510		1,000			2.75			2.44			3.97			0.98			0.73
1522		800			3.66			3.29			4.64			0.49			0.61
1573		3,300			2.20			1.95			3.05			0.92			0.61
1626		1,300			5.73			6.34			7.32			0.61			1.22

From the information above, determine the amount of Metlock Company inventory.

The amount of Metlock Company’s inventory

Answer 1

Item	Quantity	cost per	cost	NRV	NRV-	MV	Quantity	final
No		unit	to		normal			inventory
			replace		value			value
1320	1,500	3.9	3.66	5.06	3.53	3.36	1,500	5040
1333	1,200	3.29	2.81	3.66	3.05	3.05	1,200	3660
1426	1,100	5.49	4.51	5.61	4.39	4.51	1,100	4961
1437	1,300	4.39	3.78	3.59	2.49	3.59	1,300	4667
1510	1,000	2.75	2.44	2.99	2.26	2.44	1,000	2440
1522	800	3.66	3.29	4.15	3.54	3.54	800	2832
1573	3,300	2.2	1.95	2.13	1.52	1.95	3,300	6435
1626	1,300	5.73	6.34	6.71	5.49	5.26	1,300	6838
								36873
	inventory		36873