Data related to the inventories of Costco Medical Supply are presented below: Surgical Equipment Surgical Supplies Rehab Equipment Rehab Supplies Selling price $ 276 $ 134 $ 354 $ 152 Cost 156 136 255 152 Costs to sell 17 17 16 7 In applying the lower of cost or net realizable value rule, the inventory of surgical supplies would be valued at:

$117

Explanation:

Costco Medical Supply's merchandise inventory:

                  Surgical equip.  Surgical supplies  Rehab equip.  Rehab  supplies

Selling price          $276              $134                   $354                    $152

Cost                        $156              $136                   $255                    $152

Cost to sell               $17                 $17                      $16                       $7

Net realizable V.   $259              $117                   $338                    $145  

If we apply the lower of cost or net realizable rule for determining the value of surgical supplies, its value would be: $117 < $136

When we use the lower of cost or net realizable rule, we should value our inventory at the lowest value between original purchase cost and current net realizable value of the products.

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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