Purchase Solution

Inventory LCM: Applying lower of cost or market

Not what you're looking for?

Ask Custom Question

What approaches may be used in applying the lower of cost or market procedure? Which is normally used and why?

Purchase this Solution

Solution Summary

Your tutorial is 223 words and includes three exhibits to show you the three potential approaches to applying the lower of cost or market. The most common method is discussed along with a reason most do it that way.

Solution Preview

The lower of cost or market rule can be used either by apply it directly to each individual item in inventory, to each category of inventory or to the total of the inventory as a whole.

If you use a major category or inventory as a whole, increases in market prices in some items will offset the decreases in market prices of other items.

For example:
.............................................cost..........market
Green items.......................$50.00..........$70.00
Orange items......................$30.00.........$20.00
Color category....................$80.00.........$90.00

Round items......................$90.00...........$40.00
Square items.....................$95.00............$85.00
Shape category.................$185.00........$125.00

Overall ...

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Motivation

This tests some key elements of major motivation theories.