A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current FIFO inventory consists of 200 units purchased at $16 per unit.Net realizable value 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) $1,000.
B) $1,400.
C) $400.
D) $600.
E) $800.

Lower Cost

A strategy or situation where expenses are reduced, often achieved through efficient operations, bulk purchasing, or other methods to decrease the cost base.

FIFO Inventory

An inventory valuation method that assumes the first items placed in inventory are the first sold, prioritizing older stock for cost of goods sold.

Net Realizable Value

The estimated selling price of goods minus the estimated costs of completion and the costs necessary to make the sale.