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angie343536
Feb 18, 2008, 10:42 PM
Optima Corporation applies the lower of cost or market rule for inventory valuation purposes on an individual product basis. On December 31 2006, the following data was available for its two products:

Product Quantity Cost/unit Market/unit
VHS 100 $5.00 $3.20
DVD 200 $7.50 $8.00

Based on this information, what should Optima report as its ending inventory balance on its balance sheet on December 31, 2006?
MaggieMouse
Feb 20, 2008, 12:40 PM
Lower of cost or market means choose the lower price, when cost is lower, use cost, and vice versa. 100x3.2+200x7.5