Item 5Item 5 Time Remaining 56 minutes 29 seconds00:56:29 Data related to the inventories of Kimzey Medical Supply are presented below: Surgical Surgical Rehab Rehab Equipment Supplies Equipment Supplies Selling price $ 305 $ 165 $ 385 $ 210 Cost 215 135 295 207 Replacement cost 285 125 280 203 Costs to sell 48 14 34 28 Normal gross profit ratio 30 % 30 % 30 % 20 % In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at:

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?