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 | 4 | 2 | 1 |
| Estimated Selling Price | 7 | 5 | 3 |
| Selling and distribution costs | 3 | 2 | 2 |
| Units | Units | Units | |
| Units of inventory | 400 | 300 | 100 |
What is the value of inventory at the year end?
SUGGESTED SOLUTIONS
| S | M | L | |
| $ per unit | $ per unit | $ per unit | |
| Original cost | 4 | 2 | 1 |
| Units of inventory | 400 | 300 | 100 |
| Valuation based on Original cost | 1,600 | 600 | 100 |
| Estimated Selling Price | 7 | 5 | 3 |
| Selling and distribution costs | 3 | 2 | 2 |
| Net Selling price | 4 | 3 | 1 |
| Units of inventory | 400 | 300 | 100 |
| Valuation based on Net Realisable Value | 1,600 | 900 | 100 |
| Lower of cost or Net Realisable Value | 1,600 | 600 | 100 |
| Answer | 2,300 |