A Company Normally Sells Its Product for $20 Per Unit

Multiple Choice

A company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company's current inventory consists of 200 units purchased at $16 per unit. Replacement cost has now fallen to $13 per unit. What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

A) $400.
B) $600.
C) $800.
D) $1,400.
E) $1,000.