Thanks!! That really helps.

Step 1:  Determine the Market

Market is replacement cost limited to the Ceiling and the Floor

Ceiling:  Net Realizable Value (Selling price-Selling costs-costs to complete)

Floor:  Net Realizable Value - Normal Profit

If the replacement cost is > than the ceiling, market is the ceiling

If the replacement cost is < than the floor, market is the floor

If the replacement cost falls between the ceiling and the floor, market is replacement cost

Step 2: Determine Cost

Step 3:  Select the lower of cost or market

Example: Cost=$9.00 Replacement Cost=$20.00 Selling Price=$17.00 Profit=$7.00

Step 1 -

Ceiling:  $17.00

Floor:  $10.00 ($17-$7)

Since the replacement cost is > than the ceiling, the market is the ceiling=$17.00

Step 2 -

Cost $9.00

Step 3 -

Market=$17.00 Cost=$9.00

Hope this helps! 

I hope you had an "ah ha" moment. I love those moments.  =)