Explain how the lower of cost or market rule is used to value inventory.

What will be an ideal response?


The lower of cost or market rule compares the acquisition cost of inventory with the current replacement cost. The lower of these two values is then selected as the amount to be reported. Lower of cost or market can be used on the inventory as a whole, major categories of inventory, or on individual items of inventory.

Business

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A. rate range B. pay structure C. wage compression D. minimum wage

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