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Novak Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. Cost

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Item no. Quantity (a) Cost per unit Cost to replace Ceiling Floor Designated Market (b) Final Inventory (a*b)
value
1320 1700 $4.00 $3.75 $5.19 $3.63 $3.75 $6,375
1333 1400 $3.38 $2.88 $3.75 $3.12 $3.12 $4,368
1426 1300 $5.63 $4.63 $5.75 $4.50 $4.63 $6,019
1437 1500 $4.50 $3.88 $3.69 $2.56 $3.69 $5,535
1510 1200 $2.81 $2.50 $3.06 $2.31 $2.50 $3,000
1522 1000 $3.75 $3.38 $4.25 $3.62 $3.62 $3,620
1573 3500 $2.25 $2.00 $2.19 $1.56 $2.00 $7,000
1626 1500 $5.88 $6.50 $6.87 $5.62 $6.50 $9,750
Amount of Novak Company's Inventory $45,667
*Designated Market value = Mid value among cost to replace, ceiling and floor.
*Total inventory = Quantity * Designated market value per unit
*Calculations for Ceiling :
Item no. Estimated Selling price Cost to completion and Ceiling
(a) disposal (b) (a - b)
1320 $5.63 $0.44 $5.19
1333 $4.38 $0.63 $2.40
1426 $6.25 $0.50 $5.75
1437 $4.00 $0.31 $3.69
1510 $4.06 $1.00 $3.06
1522 $4.75 $0.50 $4.25
1573 $3.13 $0.94 $2.19
1626 $7.50 $0.63 $6.87
*Calculations for Floor:
Item no. Ceiling Normal Profit Floor
(a) (b) (a-b)
1320 $5.19 $1.56 $3.63
1333 $3.75 $0.63 $3.12
1426 $5.75 $1.25 $4.50
1437 $3.69 $1.13 $2.56
1510 $3.06 $0.75 $2.31
1522 $4.25 $0.63 $3.62
1573 $2.19 $0.63 $1.56
1626 $6.87 $1.25 $5.62
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