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 | 3 | 6 | 5 |
| Estimated Selling Price | 6 | 9 | 7 |
| Selling and distribution costs | 2 | 6 | 6 |
| Units | Units | Units | |
| Units of inventory | 200 | 400 | 500 |
What is the value of inventory at the year end?
SUGGESTED SOLUTIONS
| S | M | L | |
| $ per unit | $ per unit | $ per unit | |
| Original cost | 3 | 6 | 5 |
| Units of inventory | 200 | 400 | 500 |
| Valuation based on Original cost | 600 | 2,400 | 2,500 |
| Estimated Selling Price | 6 | 9 | 7 |
| Selling and distribution costs | 2 | 6 | 6 |
| Net Selling price | 4 | 3 | 1 |
| Units of inventory | 200 | 400 | 500 |
| Valuation based on Net Realisable Value | 800 | 1,200 | 500 |
| Lower of cost or Net Realisable Value | 600 | 1,200 | 500 |
| Answer | 2,300 |