Exercise - The inventory of Oheto Company on December 31, 2013, consists of the following items.
|
Part No.
|
Quantity
|
Cost per Unit
|
Cost to Replace per Unit
|
|
110
|
650
|
$100
|
$105
|
|
111
|
1,050
|
63
|
55
|
|
112
|
560
|
84
|
80
|
|
113
|
230
|
179
|
189
|
|
120
|
400
|
215
|
218
|
|
121a
|
1,610
|
17
|
15
|
|
122
|
390
|
252
|
247
|
aPart No. 121 is obsolete and has a realizable value of $0.5 each as scrap.
(a) Determine the inventory as of December 31, 2013, by the lower-of-cost-or-market method, applying this method directly to each item.
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.