Which application of the lower of cost or market rule will generally result in the lowest valuation for the ending inventory?

Question

Quizplus · Accepted Answer

Applying the lower of cost or market rule to each item of the inventory will generally result in the lowest valuation for the ending inventory. This is because it allows for specific identification of items that have experienced declines in value and assigns a lower value to these items, resulting in a lower overall valuation for the inventory. Applying the rule to each major category or to the total inventory may not take into account specific items that have declined in value, leading to a higher valuation.

Which Application of the Lower of Cost or Market Rule