1 Maddox Specialty Company a division of Lost World Inc.manufactures three model

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1 Maddox Specialty Company a division of Lost World Inc.manufactures three models of gear shift components for bicyclesthat are sold to bicycle manufacturers retailers and catalogoutlets. Since beginning operations in 1978 Maddox has used normalabsorption costing and has assumed a first-in first-out cost flowin its perpetual inventory system. The balances of the inventoryaccounts at the end of Maddoxs fiscal year November 30 2010 areshown below. The inventories are stated at cost before any year-endadjustments.The following information relates to Maddoxs inventoryand operations.

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