**Inventory Valuation Example***Question*: On the basis of the following data, what is the value of the total inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.| Item | Inventory Quantity | Unit Cost Price | Unit Market Price ||------------|--------------------|-----------------|-------------------|| Product C | 300 | $6 | $5 || Product D | 420 | $12 | $14 |*Options*:a. $6,840 b. $6,540 c. $7,380 d. $6,300 **Explanation:**To determine the value of the total inventory using the lower of cost or market method, we'll compare the unit cost price and the unit market price for each product and use the lower value.- **Product C**: The lower price is $5 (market price).- **Product D**: The lower price is $12 (cost price).**Calculation**:- Product C: 300 units × $5 = $1,500- Product D: 420 units × $12 = $5,040**Total Inventory Value**: $1,500 + $5,040 = $6,540Thus, the correct answer is (b) $6,540.

Name: **Inventory Valuation Example***Question*: On the basis of the follow
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Description: **Inventory Valuation Example***Question*: On the basis of the following data, what is the value of the total inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.| Item | Inventory Quantity | Unit Cos

Calculation of Value Of Total Inventory Item Product C Product D Total Inventory Qty 300.00 420.00 Unit Cost Price 6.00 12.00 Total Cost 1,800.00 5,040.00 Unit Market Price 5.00 14.00 Total Market Price 1,500.00 5,880.00 Lower Of Cost or Market 1,500.00 5,040.00 6,540.00So answer is Option b. $6,540

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On the basis of the following data, what is the value of the total inventory at the lower of cost or market? Apply lower of cost or market to each inventory item. Inventory Quantity Item Product C Product D a. $6,840 b. $6,540 c. $7,380 Od. $6,300 300 420 Unit Cost Price $6 12 Unit Market Price $5 14

On the basis of the following data, what is the value of the total inventory at the lower of cost or market? Apply lower of cost or market to each inventory item. Inventory Quantity Item Product C Product D a. $6,840 b. $6,540 c. $7,380 Od. $6,300 300 420 Unit Cost Price $6 12 Unit Market Price $5 14

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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