Landers Company Has 9 Units in Inventory on December 31

Multiple Choice

Landers Company has 9 units in inventory on December 31.The units were purchased in November for $180 each.The price lists from suppliers indicate the current replacement cost of the item to be $178 each.What is the effect on gross profit if Landers values its ending merchandise inventory using the lower-of-cost-or-market rule?

A) The gross profit would increase by $2.
B) The gross profit would not be affected.
C) The gross profit would decrease by $18.
D) The gross profit would increase by $18.