Stellar 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 1,300 $3.23 $3.03 $4.55 $0.35 $1.26 1333 1,000 2.73 2.32 3.54 0.51 0.51 1426 900 4.55 3.74 5.05 0.40 1.01 1437 1,100 3.64 3.13 3.23 0.25 0.91 1510 800 2.27 2.02 3.28 0.81 0.61 1522 600 3.03 2.73 3.84 0.40 0.51 1573 3,100 1.82 1.62 2.53 0.76 0.51 1626 1,100 4.75 5.25 6.06 0.51 1.01 From the information above, determine the amount of Stellar Company inventory. The amount of Stellar Company’s inventory $____
Answer- The amount of Stellar Company inventory = $28648.
Explanation-
Statement of Inventory using Lower of cost or market | ||||||||
Item No. | Units | Cost per unit $ | Estimated Selling price $ (a) | Cost to complete & Sell (b) | Net Relizable value (c=a-b) | Lower of cost or Net realizable value | Value of Inventory $ | Remark (Valued at) |
1320 | 1300 | 3.23 | 4.55 | 0.35 | 4.20 | 3.23 | 4199 | Cost price |
1333 | 1000 | 2.73 | 3.54 | 0.51 | 3.03 | 2.73 | 2730 | Cost price |
1426 | 900 | 4.55 | 5.05 | 0.40 | 4.65 | 4.55 | 4095 | Cost price |
1437 | 1100 | 3.64 | 3.23 | 0.25 | 2.98 | 2.98 | 3278 | Net Realizable |
1510 | 800 | 2.27 | 3.28 | 0.81 | 2.47 | 2.27 | 1816 | Cost price |
1522 | 600 | 3.03 | 3.84 | 0.40 | 3.44 | 3.03 | 1818 | Cost price |
1573 | 3100 | 1.82 | 2.53 | 0.76 | 1.77 | 1.77 | 5487 | Net Realizable |
1626 | 1100 | 4.75 | 6.06 | 0.51 | 5.55 | 4.75 | 5225 | Cost price |
Total | 28648 |
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