Testbank Multiple Choice Question 76 Given the historical cost of product Dominoe is $35, the selling price of product Dominoe is $40, costs to sell product Dominoe are $4, the replacement cost for product Dominoe is $41, and the normal profit margin is 20% of sales price, what is the cost amount that should be used in the lower-of-cost-or-market comparison

Haley photocopying purchases a paper from an out-of-state vendor. average weekly demand for paper is 150 cartons per week for which haley pays $15 per carton. in bound shipments from the vendor average 1000 cartoons with an average lead time of 3 weeks. haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. the vendor has recently announced that they will be building a faculty near haley photocopying that will reduce lead time to one week. further, they will be able to reduce shipments to 200 cartons. haley believes that they will be able to reduce safety stock to a 1-week supply. what impact will these changes make to haley’s average inventory level and its average aggregated inventory value?