Reative Technology reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Inventory Quantity Unit Cost NRV Optima cameras 120 $ 47 $ 77 Inspire speakers 30 57 47 Calculate the total amount to be reported for ending inventory.

$7,050

Explanation:

The computation of the total amount reported for ending inventory is shown below:

Quantity units          Cost               NRV                Lower of Cost or NRV

120                           $47                $77                   $47

30                             $57                $47                  $47

Now as we can see we pick up the lower value as the inventory should be recording by taking lower value of cost or NRV

So, the ending inventory is

= 120 units ×$47 + 30 units × $47

= $5,640 + $1,410

= $7,050

For ending inventory we simply multiplying the units with its lower cost or NRV basis

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