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Inventories

6 Months Ended

Jun. 30, 2014

5.	Inventories

Inventories consist principally of packaged meal replacements held in the Company’s warehouses. Inventory is stated at the lower of cost or market, utilizing the first-in, first-out method. The cost of finished goods includes the cost of raw materials, packaging supplies, direct and indirect labor and other indirect manufacturing costs. On a quarterly basis, management reviews inventory for unsalable or obsolete inventory.

Inventories consisted of the following at June 30, 2014 and December 31, 2013:

	2014		2013
Raw Materials	$	4,085,000	$	5,381,000
Packaging		795,000		757,000
Non-food Finished Goods		939,000		855,000
Finished Goods		11,910,000		11,356,000
Reserve for Obsolete Inventory		(150,000)		(290,000)
	$	17,579,000	$	18,059,000

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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