A company has the following per unit original costs and replacement costs for its inventory: 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 lower of cost or market, the total value of this company's ending inventory must be reported as:
A)$1,180.00.
B)$1,075.00.
C)$1,112.50 or $1075.00, depending upon whether LCM is applied to individual items or the inventory as a whole.
D)$1,112.50.
E)$1180.00 or $1075.00, depending upon whether LCM is applied to individual items or to the inventory as a wholE.

Question

A company has the following per unit original costs and replacement costs for its inventory: 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 lower of cost or market, the total value of this company's ending inventory must be reported as:
A)$1,180.00. 
B)$1,075.00. 
C)$1,112.50 or $1075.00, depending upon whether LCM is applied to individual items or the inventory as a whole. 
D)$1,112.50. 
E)$1180.00 or $1075.00, depending upon whether LCM is applied to individual items or to the inventory as a wholE.

Quizplus · Accepted Answer

The Answer of A company has the following per unit original costs and replacement costs for its inventory: 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 lower of cost or market, the total value of this company's ending inventory must be reported as:
A)$1,180.00. 
B)$1,075.00. 
C)$1,112.50 or $1075.00, depending upon whether LCM is applied to individual items or the inventory as a whole. 
D)$1,112.50. 
E)$1180.00 or $1075.00, depending upon whether LCM is applied to individual items or to the inventory as a wholE.

A Company Has the Following Per Unit Original Costs and Replacement