Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
(skis, boots, apparel, supplies)
selling price: (180,000; 150,000; 120,000; 60,000)
cost: (128,000; 133,000; 90,000; 45,000)
replacement cost: (120,000; 133,000; 110,000; 41,000)
sales commission: (120,000; 130,000; 110,000; 41,000)
normal gross profit ratio: (20%, 20%, 15%, 15%)
In applying the LCM rule, the inventory of apparel would be valued at:
A. $108,000.
B. $90,000.
C. $110,000.
D. $115,000.
Answer: B. $90,000.
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