The Kidde Corporation uses the lower-of-cost-or-market method to value inventory.Data regarding the items in work-in-process inventory are presented below.

-See information regarding the Kidde Corporation above.The inventory valuation for highlighters using the lower-of-cost-or-market method is

Question

The Kidde Corporation uses the lower-of-cost-or-market method to value inventory.Data regarding the items in work-in-process inventory are presented below.
 
-See information regarding the Kidde Corporation above.The inventory valuation for highlighters using the lower-of-cost-or-market method is

Quizplus · Accepted Answer

The inventory valuation for highlighters can be calculated using the lower-of-cost-or-market method, which compares the cost of the inventory to its market value and takes the lower of the two as the inventory value. The cost for the highlighters is $30,000 ($5,000 + $25,000), and the market value is $29,200 ($2.90 x 10,000 plus $2.92 x 15,000). Therefore, the inventory valuation for highlighters using the lower-of-cost-or-market method is $29,200.

The Kidde Corporation Uses the Lower-Of-Cost-Or-Market Method to Value Inventory