Given the Historical Cost of Product Z Is $40, the Selling

Multiple Choice

Given the historical cost of product Z is $40, the selling price of product Z is $50, costs to sell product Z are $6, the replacement cost for product Z is $41, and the normal profit margin is 40% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method?

A) $22.
B) $40.
C) $42.
D) $41.