Exercise 9-7 Metlock Company follows the practice of pricing its inventory at th
ID: 2515542 • Letter: E
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.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
From the information above, determine the amount of Metlock Company inventory.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320 1,500 $3.90 $3.66 $5.49 $0.43 $1.53 1333 1,200 3.29 2.81 4.27 0.61 0.61 1426 1,100 5.49 4.51 6.10 0.49 1.22 1437 1,300 4.39 3.78 3.90 0.31 1.10 1510 1,000 2.75 2.44 3.97 0.98 0.73 1522 800 3.66 3.29 4.64 0.49 0.61 1573 3,300 2.20 1.95 3.05 0.92 0.61 1626 1,300 5.73 6.34 7.32 0.61 1.22Explanation / Answer
Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit NRV NRV less profit Market LCM Inventory value 1320 1500 3.9 3.66 5.49 0.43 1.53 5.06 3.53 3.66 3.66 5490 1333 1200 3.29 2.81 4.27 0.61 0.61 3.66 3.05 3.05 3.05 3660 1426 1100 5.49 4.51 6.1 0.49 1.22 5.61 4.39 4.51 4.51 4961 1437 1300 4.39 3.78 3.9 0.31 1.1 3.59 2.49 3.59 3.59 4667 1510 1000 2.75 2.44 3.97 0.98 0.73 2.99 2.26 2.44 2.44 2440 1522 800 3.66 3.29 4.64 0.49 0.61 4.15 3.54 3.54 3.54 2832 1573 3300 2.2 1.95 3.05 0.92 0.61 2.13 1.52 1.95 1.95 6435 1626 1300 5.73 6.34 7.32 0.61 1.22 6.71 5.49 6.34 5.73 7449 37934 The amount of Metlock Company’s inventory $37934
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