Rose co. sells one product and uses the last-in, first-out method to determine inventory cost. information for the month of january follows: total units unit cost beginning inventory, 1/1 8,000 $8.20 purchases, 1/5 12,000 7.90 sales 10,000 rose has determined that at january 31, the replacement cost of its inventory was $8 per unit, and the net realizable value was $8.80 per unit. rose’s normal profit margin is $1 per unit. rose applies the lower-of-cost-or-market rule to total inventory and records any resulting loss. at january 31, what should be the net carrying amount of rose’s inventory?

a. $79,000

b. $78,000

c. $80,000

d. $81,400

C) $80,000

Explanation:

Since Rose uses the LIFO method for determining COGS, the 10,000 units sold should be recorded at $7.90 (purchase price 1/5).

10,000 units still remain in inventory (8,000 beginning + 2,000 last purchase). Using the LIFO costing method the inventory unit cost should be [(8,000 x $8.20) + (2,000 x $7.90)] / 10,000 = $8.14 per unit

If the replacement cost is $8 per unit, and Rose decides to use lower-of-cost-or-market rule, then she should use the lowest cost which is the replacement cost ($8 < $8.14).

So the ending inventory's total cost is $8 per unit x 10,000 units = $80,000

barak obama

explanation:

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