A Company Has the Following Per Unit Original Costs and Replacement

question 3

Multiple Choice

A company has the following per unit original costs and replacement costs for its inventory.LCM is applied to individual items. Part A: 50 units with a cost of $5,and replacement cost of $4.50
Part B: 75 units with a cost of $6,and replacement cost of $6.50
Part C: 160 units with a cost of $3,and replacement cost of $2.50
Under the lower of cost or market method,the total value of this company's ending inventory is:

• A)$1,180.00.
• B)$1,075.00.
• C)$1,112.50.
• D)$1,217.50.
• E)$1,137.50.

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Definitions:

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression, often indicating proportionality.

Normal Good

A good for which demand increases as consumer income rises, and decreases as consumer income falls.

Income Elasticity

A rephrased definition: The responsiveness of demand for an item to changes in the income of the people demanding the item.

Inferior Good

A good or service whose consumption declines as income rises, prices held constant.