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A company has the following products in its ending inventory. Compute lower of cost or market for inventory applied separately to each product Product Quantity Cost per Unit Market per UnitProduct A 10 $ 710 $ 680Product B 15 $ 510 $ 550Product C 20 $ 660 $ 685Multiple Choice$27,950.$27,650.$1,880.$28,750.$1,915.

Question

A company has the following products in its ending inventory. Compute lower of cost or market for inventory applied separately to each product Product Quantity Cost per Unit Market per UnitProduct A 10 710 710 680Product B 15 510 510 550Product C 20 660 660 685Multiple Choice27,950.27,950.27,650.1,880.1,880.28,750.$1,915.

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Solution

To compute the lower of cost or market for inventory applied separately to each product, we need to compare the cost per unit and the market per unit for each product. We then multiply the lower value by the quantity of each product.

Here's how to do it:

  1. Product A: The cost per unit is 710andthemarketperunitis710 and the market per unit is 680. The lower value is 680.Multiplythisbythequantity(10),weget680. Multiply this by the quantity (10), we get 680 * 10 = $6,800.

  2. Product B: The cost per unit is 510andthemarketperunitis510 and the market per unit is 550. The lower value is 510.Multiplythisbythequantity(15),weget510. Multiply this by the quantity (15), we get 510 * 15 = $7,650.

  3. Product C: The cost per unit is 660andthemarketperunitis660 and the market per unit is 685. The lower value is 660.Multiplythisbythequantity(20),weget660. Multiply this by the quantity (20), we get 660 * 20 = $13,200.

Finally, add up the values for each product to get the total: 6,800+6,800 + 7,650 + 13,200=13,200 = 27,650.

So, the lower of cost or market for inventory applied separately to each product is $27,650.

This problem has been solved

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