A Company Normally Sells Its Product for $20 Per Unit

question 155

Multiple Choice

A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current FIFO inventory consists of 200 units purchased at $16 per unit.Net realizable value has now fallen to $13 per unit.What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

• A)$1,000.
• B)$1,400.
• C)$400.
• D)$600.
• E)$800.

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