Michael Bolton Company follows the practice of pricing its inventory at the lowe
ID: 2446202 • Letter: M
Question
Michael Bolton Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
From the information above, determine the amount of Bolton Company inventory.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320 1,500 $3.97 $3.72 $5.58 $0.43 $1.55 1333 1,200 3.35 2.85 4.34 0.62 0.62 1426 1,100 5.58 4.59 6.20 0.50 1.24 1437 1,300 4.46 3.84 3.97 0.31 1.12 1510 1,000 2.79 2.48 4.03 0.99 0.74 1522 800 3.72 3.35 4.71 0.50 0.62 1573 3,300 2.23 1.98 3.10 0.93 0.62 1626 1,300 5.83 6.45 7.44 0.62 1.24Explanation / Answer
The amount of inventory is as follows:
Item no. Quantity Cost per unit(A) Cost to replace Estimated selling price Cost of disposal Net selling price(B) A or B whichever is lower Inventory cost 1320 1500 3.97 3.72 5.58 0.43 5.15 3.97 5955 1333 1200 3.35 2.85 4.34 0.62 3.72 3.35 4020 1426 1100 5.58 4.59 6.2 0.5 5.7 5.58 6138 1437 1300 4.46 3.84 3.97 0.31 3.66 3.66 4758 1510 1000 2.79 2.48 4.03 0.99 3.04 2.79 2790 1522 800 3.72 3.35 4.71 0.5 4.21 3.72 2976 1573 3300 2.23 1.98 3.1 0.93 2.17 2.17 7161 1626 1300 5.83 6.45 7.44 0.62 6.82 5.83 7579 Total 41377