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

Question

Exercise 9-7 Metlock Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis Cost of Completion and Disposal Estimated Cost per No. Quantity Unit 13201,600 $3.46 2.92 4.86 3.89 2.43 3.24 1.94 5.08 Selling Cost to Replace $3.24 2.48 4.00 3.35 2.16 2.92 1.73 5.62 Normal Profit $1.35 0.54 1.08 0.97 0.65 0.54 0.54 1.08 Item Price 1333 1,300 1426 1,200 1437 1,400 15101,100 1522 1573 3,400 16261,400 $4.86 3.78 5.40 3.46 3.51 4.10 2.70 6.48 $0.38 0.54 0.43 0.27 0.86 0.43 0.81 0.54 900 From the information above, determine the amount of Metlock Company inventory The amount of Metlock Company's inventory LINK TO TEXT

Explanation / Answer

Item No Cost Per Unit Cost to Replace NRV * Net real value less Normal value ** MV Quantity Final Inventory value 1320 3.46 3.24 4.48 3.13 3.24          1,600           5,184 1333 2.92 2.48 3.24 2.7 2.7          1,300           3,510 1426 4.86 4 4.97 3.89 4          1,200           4,800 1437 3.89 3.35 3.19 2.22 3.19          1,400           4,466 1510 2.43 2.16 2.65 2 2.16          1,100           2,376 1522 3.24 2.92 3.67 3.13 3.13             900           2,817 1573 1.94 1.73 1.89 1.35 1.73          3,400           5,882 1626 5.08 5.62 5.94 4.86 5.08          1,400           7,112 Inventory Value        36,147 * NRV = EsTmated Selling Price -Cost of CompleTon and Disposal 4.86 - .38 ** Net real value less Normal value = NRV - Normal Profit 4.48 - 1.35 Cost is used because it is lower than designated market value

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