A Company Has the Following Per Unit Original Costs and Replacement

question 180

Multiple Choice

A company has the following per unit original costs and replacement costs for its inventory: Part A: 10 units with a cost of $3 and replacement cost of $2.50.
Part B: 40 units with a cost of $9 and replacement cost of $9.50.
Part C: 75 units with a cost of $8 and replacement cost of $7.50.
Under the lower of cost or market method, the total value of this company's ending inventory must be reported as:

• A)$990.00.
• B)$947.50.
• C)$967.50.
• D)$967.50 or $947.50, depending upon whether LCM is applied to individual items or the inventory as a whole.
• E)$990.00 or $947.50, depending upon whether LCM is applied to individual items or to the inventory as a whole.

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