Using the Lower of Cost or Market, What Should the Total

question 21

Essay

Using the lower of cost or market, what should the total inventory value be for the following items:
$$\begin{array} { | l | l | l | l | l | c | } \hline \text { Item } & \text { Quantity } & \text { Unit cost price } & \text { Unit market price } & \text { Total cost price } & \begin{array} { l } \text { Total market } \\\text { price }\end{array} \\\hline \text { A } & 300 & \$ 15.00 & \$ 14.50 & \$ 4,500 & \$ 4,350 \\\hline \text { B } & 200 & \$ 14.00 & \$ 15.00 & \$ 2,800 & \$ 3,000 \\\hline \text { C } & 100 & \$ 17.00 & \$ 17.50 & \$ 1,700 & \$ 1,750 \\\hline\end{array}$$ Apply the lower-of-cost-or-market method to inventory as a whole.

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Definitions:

Income Taxes

Taxes levied by governments on the income generated by individuals or entities, which vary according to the level of income earned.

Federal Budget Surpluses

Occurs when a government's income exceeds its spending during a particular fiscal year.

Market Globalization

The process of integration and interaction among different national markets, leading to a global marketplace with diminished trade barriers.

Technological Innovation

The introduction of new technologies or the improvement of existing ones, leading to better products, services, or processes.