Mallard Auto Parts, Inc

Mallard Auto Parts, Inc.has on hand 1,000 fenders for 1953 Studebakers.Mallard purchased the fenders in 1966 for $30 each and the selling price is $400 each.Only rarely does Mallard sell a Studebaker fender and it is highly unlikely that more than 100 of the remaining fenders will ever be sold.However, Mallard has ample storage space and feels
An obligation to Studebaker owners.Therefore, the company will not salvage the fenders and will continue to sell them for $400 each.Scrap value of the fenders is $5 each.Under the lower of cost or market inventory method,

A) Mallard can expense the 900 excess fenders.
B) Mallard can expense all 1,000 of the fenders because of the unlikelihood they will be sold.
C) Mallard should value the fenders at $7,500 [(100 × $30) + (900 × $5) ].
D) Mallard should value the fenders at $5,000 (1,000 × $5) .
E) None of these.