The company sells three products - S, M and L. The following information was available at the year end.
| S | M | L | |
| $ per unit | $ per unit | $ per unit | |
| Original cost | 9 | 5 | 3 |
| Estimated Selling Price | 12 | 8 | 5 |
| Selling and distribution costs | 8 | 5 | 4 |
| Units | Units | Units | |
| Units of inventory | 500 | 900 | 800 |
What is the value of inventory at the year end?
SUGGESTED SOLUTIONS
| S | M | L | |
| $ per unit | $ per unit | $ per unit | |
| Original cost | 9 | 5 | 3 |
| Units of inventory | 500 | 900 | 800 |
| Valuation based on Original cost | 4,500 | 4,500 | 2,400 |
| Estimated Selling Price | 12 | 8 | 5 |
| Selling and distribution costs | 8 | 5 | 4 |
| Net Selling price | 4 | 3 | 1 |
| Units of inventory | 500 | 900 | 800 |
| Valuation based on Net Realisable Value | 2,000 | 2,700 | 800 |
| Lower of cost or Net Realisable Value | 2,000 | 2,700 | 800 |
| Answer | 5,500 |