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Oheto Company

Price: $2.50


E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2013, consists of the following items.

Part No.  Quantity  Cost per Unit  Cost to Replace per Unit 
110 600 $95 $100
111 1,000 60 52
112 500 80 76
113 200 170 180
120 400 205 208
121a  1,600 16 14
122 300 240 235

aPart No. 121 is obsolete and has a realizable value of $0.50 each as scrap.

Instructions

(a) Determine the inventory as of December 31, 2013, by the lower-of-cost-or-market method, applying this method directly to each item.

(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.

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