Exercise 9-7 Ayayai Company follows the practice of pricing its inventory at the

Question

Exercise 9-7 Ayayai Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

Cost to

Replace

Normal

Profit

From the information above, determine the amount of Ayayai Company inventory.

The amount of Ayayau Company's inventory $_______

Item # Quantity Cost per Unit

Cost to

Replace

Estimated Selling Price Cost of Completion and Disposal

Normal

Profit

1320 1,500 $3.39 $3.18 $4.77 $0.37 $1.33 1333 1,200 2.86 2.44 3.71 0.53 0.53 1426 1,100 4.77 3.92 5.30 0.42 1.06 1437 1,300 3.82 3.29 3.39 0.27 0.95 1510 1,000 2.39 2.12 3.45 0.85 0.64 1522 800 3.18 2.86 4.03 0.42 0.53 1573 3,300 1.91 1.70 2.65 0.80 0.53 1626 1,300 4.98 5.51 6.36 0.53 1.06

Explanation / Answer

Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit NRV NRV less normal profit Market Lower of cost or market Inventory value 1320 1,500 $3.39 $3.18 $4.77 $0.37 $1.33 $4.40 $3.07 $3.18 $3.18 $4,770 1333 1,200 2.86 2.44 3.71 0.53 0.53 $3.18 $2.65 $2.65 $2.65 $3,180 1426 1,100 4.77 3.92 5.3 0.42 1.06 $4.88 $3.82 $3.92 $3.92 $4,312 1437 1,300 3.82 3.29 3.39 0.27 0.95 $3.12 $2.17 $3.12 $3.12 $4,056 1510 1000 2.39 2.12 3.45 0.85 0.64 $2.60 $1.96 $2.12 $2.12 $2,120 1522 800 3.18 2.86 4.03 0.42 0.53 $3.61 $3.08 $3.08 $3.08 $2,464 1573 3,300 1.91 1.7 2.65 0.8 0.53 $1.85 $1.32 $1.70 $1.70 $5,610 1626 1,300 4.98 5.51 6.36 0.53 1.06 $5.83 $4.77 $5.51 $4.98 $6,474 Total $32,986 The amount of Ayayau Company's inventory $ 32986

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