Question

Martinez Company's ending inventory includes the following items.

Product	Units	Cost per Unit				Market per Unit
Helmets	26		$	54			$	58
Bats	19			82				76
Shoes	40			99				95
Uniforms	44			40				40

  
Compute the lower of cost or market for ending inventory applied separately to each product.
  

Answer 1

Answer)

Calculation of value of ending inventory of Martinez Company

Product	Cost per unit	Market price per unit	Lower of Cost or Market Price per unit	Units in inventory	Value of Inventory
Helmets	54	58	54	26	1,404
Bats	82	76	76	19	1,444
Shoes	99	95	95	40	3,800
Uniforms	40	40	40	44	1,760
Total					8,408

Therefore the value of ending inventory is $ 8,408.

Working Note:

Value of inventory = Units of inventory X Lower of Cost or Market price

Helmets:

Value of inventory = 26 units X $ 54.00 per unit

                                  = $ 1,404

The value of 26 units of Helmets is $ 1,404.

Bats:

Value of inventory = 19 units X $ 76.00 per unit

                                  = $ 1,444

The value of 19 units of Bats is $ 1,444.

Shoes:

Value of inventory = 40 units X $ 95.00 per unit

                                  = $ 3,800

The value of 40 units of Shoes is $ 3,800.

Uniforms:

Value of inventory = 44 units X $ 40.00 per unit

                                  = $ 1,760

The value of 44 units of Uniforms is $ 1,760.