Question - Novelli's Nursery has developed the following data for lower-of-cost-or-market valuation for its products:
The normal profit margin on all trees is 20% of selling price and disposal costs are 10% of selling price.
Selling Cost to
Price Cost Replace
Broad leaf trees
Ash $ 1,800 $1,000 $ 800
Beech 2,200 1,600 1,400
Needle leaf trees
Cedar 2,500 1,750 1,800
Fir 3,600 3,350 3,200
Fruit trees
Apple 1,800 1,400 1,300
Cherry 2,300 1,800 1,700
Required: Determine the balance sheet inventory carrying value assuming the LCM rule is applied to individual trees.