Question

Quiz 9.1	Frozen Burritos		Frozen Tacos
	Bean	Beef	Soft	Crunchy
Cost	1000	2000	3000	4000
Replace cost	1500	1800	2500	3200
Sell price	1700	1900	3200	3500
Net realizable value	1400	1700	3100	3300
NRV less gross profit	1100	1500	2600	3100
What is total inventory value using lower of cost or NRV on an item basis?
What is total inventory value using lower of cost or NRV on catagory basis?
What is total inventory value using lower of cost or NRV on total inventory basis?

Answer 1

(1)

total inventory value using lower of cost or NRV on an item basis:

bean = $1000

beef = $1700

soft = $3000

crunchy = $3300

(2)

total inventory value using lower of cost or NRV on catagory basis:

frozen burritos = ($1000 + $2000) or ($1400 + $1700) = $3000

frozen tacos = ($3000 + $4000) or ($3100 + $3300) = $6400

(3)

total inventory value using lower of cost or NRV on total inventory basis:

= ($1000 + $2000 + $3000 + $4000) or ($1400 + $1700 + $3100 + $3300) = $9500