When applying the lower of cost or market method,market value cannot exceed the
A)floor.
B)net realizable value.
C)net realizable value less a normal profit margin.
D)replacement cost.

Question

Quizplus · Accepted Answer

The lower of cost or market method compares the cost of inventory with its market value, and the market value should not exceed the net realizable value (selling price minus any further costs). Therefore, option B is the best choice as it accurately defines the maximum market value allowable under this method.

When Applying the Lower of Cost or Market Method,market Value