### Inventory at the Lower of Cost or Market #### Instructions This exercise involves determining the value of inventory at the lower of cost or market (LCM). Two sections are to be completed based on provided values: one for individual products and one for inventory classes. #### Section A: Product Inventory 1. **Table Components:** - **Inventory Quantity:** The number of units available for each product. - **Cost per Unit:** The original cost to produce or purchase each unit. - **Market Value per Unit (Net Realizable Value):** The estimated selling price minus any costs of completion, disposal, and transportation. - **Columns for Calculations:** - **Cost:** Total cost based on Inventory Quantity and Cost per Unit. - **Market:** Total market value based on Inventory Quantity and Market Value per Unit. - **Lower of Cost or Market:** The lower value between the total cost and total market value for each product. 2. **Product List:** - Model A - Model B - Model C - Model D - Model E 3. **Task:** Calculate the LCM for each model by comparing the calculated total cost and total market values, then sum the totals. #### Section B: Class Inventory 1. **Table Components (same as Product Inventory):** - Similar setup with classes instead of individual products. 2. **Class List:** - Class 1 - Model A - Model B - Model C 3. **Task:** Similarly, determine the LCM for each class by completing the table. #### Additional Notes The aim is to ensure inventory is accurately valued, minimizing potential losses from overvaluation. This is critical for financial reporting and analysis, complying with GAAP (Generally Accepted Accounting Principles). **Diagrams/Graphs:** The document contains tables with fields to be filled in with data as part of completion. There are no visual graphs or diagrams beyond these tables. **Lower-of-Cost-or-Market Inventory** On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form provided. --- **Product Details:** - **Class 1:** - **Model A** - Inventory Quantity: 46 - Cost per Unit: $190 - Market Value per Unit (Net Realizable Value): $191 - **Model B** - Inventory Quantity: 25 - Cost per Unit: $109 - Market Value per Unit (Net Realizable Value): $95 - **Model C** - Inventory Quantity: 41 - Cost per Unit: $49 - Market Value per Unit (Net Realizable Value): $42 - **Class 2:** - **Model D** - Inventory Quantity: 45 - Cost per Unit: $197 - Market Value per Unit (Net Realizable Value): $213 - **Model E** - Inventory Quantity: 8 - Cost per Unit: $71 - Market Value per Unit (Net Realizable Value): $49 **Instructions:** a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory. --- **Inventory at the Lower of Cost or Market:** | Product | Inventory Quantity | Cost per Unit | Market Value per Unit (Net Realizable Value) | Cost | Market | Lower of Cost or Market | |----------|--------------------|---------------|---------------------------------------------|------|--------|-------------------------| | Model A | | $ | $ | $ | $ | $ | | Model B | | $ | $ | $ | $ | $ | | Model C | | $ | $ | $ | $ | $ | | Model D | | $ | $ | $ | $ | $ | | Model E | | $ | $ | $ | $ | $ | Fill in the columns to calculate the final inventory values using the lower-of-cost-or-market rule.