Inventories

Inventories are stated at the lower of cost and net realizable value. In the United States, we manufacture certain finished products and parts inventories for drill bits, completion products, bulk materials and other tools that are recorded using the last-in, first-out method, which totaled $204 million as of June 30, 2018 and $177 million as of December 31, 2017. If the average cost method had been used, total inventories would have been $30 million higher than reported as of June 30, 2018 and $31 million higher as of December 31, 2017. The cost of the remaining inventory was recorded using the average cost method. Inventories consisted of the following:



Millions of dollars	June 30, 2018		December 31, 2017
Finished products and parts	$	1,697	$	1,547
Raw materials and supplies	777		703
Work in process	163		146
Total	$	2,637	$	2,396

All amounts in the table above are reported net of obsolescence reserves of $276 million as of both June 30, 2018 and December 31, 2017.