The Warren Company Uses the Perpetual Inventory System and Has

True/False

The Warren Company uses the perpetual inventory system and has computed the cost of its inventory to be $12,800 as follows: 200 units of Product A at a cost per unit of $20; 300 units of Product B at a cost per unit of $24; and 100 units of Product C at a cost per unit of $16. The current replacement cost of each of the above items is $25, $22 and $14, respectively. Warren's accountant is not sure yet whether to apply the lower-of-cost-or-market rule to each individual item or to the entire stock of inventory in the aggregate. Indicate whether each of the following statements pertaining to the Warren Company is true or false.________ a)When referring to Product B, the "cost" totals $7,200.________ b)If Warren applies the lower-of-cost-or-market rule to each individual inventory item, Product A would be listed at $25 per unit.________ c)Warren would record a write-down of inventory if it applies this rule to each individual inventory item but would not have a write-down if it applies the rule to the entire stock of inventory in the aggregate.________ d)If Warren applies this rule to each individual inventory item, inventory of $12,000 will be shown on the balance sheet.________ e)The lower of cost or market is $1,600 for the 100 units of Product C.