Reference no: EM132505013

Data related to the inventories of Kimzey Medical Supply are presented below:

                          Surgical       Surgical                Rehab                 Rehab

                         Equipment.  Supplies             Equipment           Supplies

Selling price.       $270             $130                $350                  $175

Cost                    180              100                  260                 172

Replacement cost       250          90                    245                   168

Costs to sell                   34            7                     27                   14

Normal gross-                40%               40%               40%               40%

profit ratio

Question 1: In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at:

1. $110.
2. $100.
3. $90.
4. $83.