Question: Simmons, Inc. uses the lower-of-cost-or-market method to value its inventory that is accounted for using the FIFO method . Data regarding an item in its

Simmons, Inc. uses the lower-of-cost-or-market method to value its inventory that is accounted for using the FIFO method. Data regarding an item in its inventory is as follows:

Cost $26

Replacement cost 20

Selling price 30

Cost of completion and disposal 2

Normal profit margin 7

What is the lower-of-cost-or-market for this item?

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