If a Company Values Inventory at the Lower of Cost

question 145

Multiple Choice

If a company values inventory at the lower of cost or market, which of the following is the value of merchandise inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole. $$\begin{array} { | l | l | l | l | } \hline \text { Item } & \text { Inventory Quantity } & \text { Unit Cost Price } & \text { Unit Market Price } \\\hline \text { Product C } & 420 & \$ 6 & \$ 5 \\\hline \text { Product D } & 370 & 12 & 14 \\\hline\end{array}$$

• A) $6,960
• B) $7,700
• C) $6,540
• D) $7,280

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Definitions:

Conflict Theory

A perspective in sociology that emphasizes the social, political, or material inequality of a social group, analyzing the conflict between competing interests.

Functionalism

A framework in sociology that explains social structures and institutions as parts of a cohesive system, each serving a specific function for the stability and continuance of society.

Psychoanalytic Theories

A set of theories originating from Sigmund Freud that focus on unconscious motivations and conflicts as key factors influencing behavior and personality.

Sigmund Freud

An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.