Use the Lower-Of-Cost-Or-Market Rule to Determine the Value of the Following

question 104

Multiple Choice

Use the lower-of-cost-or-market rule to determine the value of the following inventory for Bargain Bonanza, Inc. $$\begin{array} { l l l l l l } \text { ITEM } & \text { QTY } & \text { COST } & \text { MKT } & \text { BASIS } & \text { AMOUNT } \\\hline \text { Mountain bikes } & 154 & \$ 598 & \$ 554 & & \\\text { Fax machines } & 133 & 163 & 212 & & \\\text { Dishwashers } & 457 & 508 & 772 & \\\text { TVs } & 491 & 196 & 252 & \\\text { VCRs } & 123 & 259 & 235 &\end{array}$$ Total value in Inventory is:

• A) $85,316
• B) $232,156
• C) $464,292
• D) $92,092

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Definitions:

Pollution Abatement

Measures and activities undertaken to reduce, control, or eliminate pollution from various sources in order to protect the environment.

Marginal Utility

The further gratification or value experienced by an individual upon consuming an extra unit of a particular good or service.

Supply-Side Market Failures

Situations where the supply side of a market does not allocate resources efficiently, often due to externalities or public goods problems.

Sellers

Individuals or entities that offer goods or services for sale in the market.