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Tutorial   18589

The inventory of Oheto Company on December 31, 2013, consists of the following items. Part No. Quantity Cost per Unit Cost to Replace per Unit 110 6...

Question:

The inventory of Oheto Company on December 31, 2013, consists of the following items.

 Part No.    Quantity      Cost per Unit    Cost to Replace per Unit

110             600                    $95                                    $100                                                                                                            

111              11,000                 60                                      52                                                                                                             

112               500                      80                                     76                                                                                                              

113               200                     170                                   180                                                                                                            

120             400                     205                                    208                                                                                                             

121              1,600                    16                                     14                                                                                                             

 122               300                    240                                   235                                                                                                            

 a Part No. 121 is obsolete and has a realizable value of $0.50 each as a scrap.

Required:

1           Determine the inventory as of December 31, 2013, by the lower of cost or market method, applying this method directly to each item.

2            Determine the inventory by the lower of cost or market method, applying the method to

the total of the inventory.