Sparks Furniture Company carries three lines of sofas. Information about the sofa inventory as of the end of its most recent fiscal year follows. If LCM is applied to each separate product line, what is the amount of the adjustment that must be made to the company's inventory?

Product Line Cost per Unit Market Value per Unit Quantity

Rustic $785 $895 360

Mediterranean 685 775 470

Contemporary 1,115 680 360

A. $81,900

B. $156,600

C. $35,100

D. $74,700

B. $156,600

Explanation:

The computation of the amount for adjustment made to the inventory for the company is shown below:          

Product LineCost per unitMarket value per unitLower of Market value or CostCost or Market valueDiff per unitQtyAdjustment Required

Rustic   $785   $895  $785  Cost value No adjustment required as cost is lower

Mediterranean $685  $775  $685  Cost value No adjustment required as cost is lower

Contemporary $1,115  $680  $680 Market value $435  360  $156,600

Since in the contemporary product line the market value per unit is lower than the cost per unit so we take the difference and then multiply the quantity so the value comes is $156,600

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the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.