Data related to the inventories of Kimzey Medical Supply are presented below:
- In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at:
A) $100.
B) $90.
C) $80.
D) $75.

Question

Data related to the inventories of Kimzey Medical Supply are presented below: 
- In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at:
A) $100. 
B) $90. 
C) $80. 
D) $75.

Quizplus · Accepted Answer

RC = $80.
NRV = $120 ? $5 = $115.
NRV - Normal profit margin = $115 - ($120 × 30%) = $79.
Designated market = RC = $80.
Cost = $90.
Market is lower than cost.

Data Related to the Inventories of Kimzey Medical Supply Are