Nelson Corporation Sells Three Different Products When Applying the Lower of Cost or Market Rule to Available

question 133

Multiple Choice

Nelson Corporation sells three different products. The following information is available on December 31: $$\begin{array} { | c | c | c | c | } \hline \text { Inventory Item } & \text { Units } & \text { Cost per unit } & \text { Market value per unit } \\\hline X & 300 & \$ 4.00 & \$ 3.50 \\\hline Y & 600 & \$ 2.00 & \$ 1.50 \\\hline Z & 1,500 & \$ 3.00 & \$ 4.00 \\\hline\end{array}$$ When applying the lower of cost or market rule to each item, what will Nelson's total ending inventory balance be?

• A)$6,900
• B)$6,450
• C)$7,950
• D)$6,600

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Definitions:

Bidding

The act of offering a specific price for something, especially in the context of an auction or public sale.

Marketing Contracts

Agreements between businesses and marketing services or platforms detailing the scope, performance metrics, and payment for marketing efforts.

Production Contracts

Legal agreements detailing the specifications, quantities, and payments for goods or services.

Spot Markets

Markets where financial instruments or commodities are bought and sold for immediate delivery, contrasting with futures markets where delivery is set for a future date.