Jonathan Brandis Company is a food wholesaler that supplies independent grocery stores in the region. The company has a perpetual inventory system for all of its food products. The FIFO method of inventory valuation is used to determine the cost of the inventory at the end of each month.

Transactions and other related information regarding two of the items (instant coffee and sugar) carried by Brandis are given below for October 2008, the last month of Brandis's fiscal year.

Brandis's sales terms are 1/10, net/30, f.o.b. shipping point. Brandis records all purchases net of purchase discounts and takes all purchase discounts. The most recent quoted price for coffee is $60 per case and for sugar $6.10 per baler, before freight and purchase discounts.

Instructions
(a) Calculate the number of units in inventory and the FIFO unit cost for instant coffee and sugar as of October 31, 2008.
(b) Brandis Company applies the lower-of-cost-or-market rule in valuing its year-end inventory. Calculate the total dollar amount of the inventory for instant coffee and sugar applying the lower-of-cost-or-market rule on an individual-product basis.
(c) Could Brandis Company apply the lower-of-cost-or-market rule to groups of products or the inventory as a whole rather than on an individual-product basis? Explain youranswer.

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Instant Coffee Sugar Standard unit of packaging Inventory, 10/1/08 Purchases Baler containing 12, five-pound bags. 500 balers Case containing 24, one-pound jars. 1,000 cases$60.20 per case $6.50 per baler 1. 10/10/08-1,600 cases@ S62.10 per case plus freight of $480. 2. 10/20/08-2,400 cases$64.00 per case plus freight of $480. 10/5/08-850 balers $5.76 per baler plus freight of $320. 2. 10/16/08-640 balers$6.00 per baler plus freight of $320 3. 10/24/08-600 balers@$6.20 per baler plus freight of $360. Net 30 days, f.o.b. shipping point Purchase terms October sales Returns and allowances 2/10, net/30, f.o.b. shipping point 3,600 cases $76.00 per case A customer returned 50 cases that had been shipped in error. The customer's account was credited for $3,800. 1,950 balers$8.00 per baler As the October 16 purchase was unloaded, 20 balers were discov- ered damaged. A representative of the trucking firm confirmed the damage and the balers were discarded. Credit of $120 for the 6 merchandise and $10 for the freight was received by Brandis. Inventory values 10/31/08 Net realizable value $66.00 per case $6.60 per baler Net realizable value less a normal profit of 15% of net realizable value $56.10 per case $5.61 per baler