A company has the following information for its inventories A, B, C, and D: Quantity Historical Cost Net Realizable Value
A 15 $20 $25
B 20 35 30
C 40 25 40
D 25 50 35

The necessary adjustment associated with the lower of cost and net realizable value would be:

a. Inventory 675 Cost of Goods Sold 675
b. Cost of Goods Sold 675 Inventory 675
c. Inventory 475 Cost of Goods Sold 475
d. Cost of Goods Sold 475 Inventory 475

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.