Year-end inventory write-down at Atlas Apparel

You are the audit senior reviewing Atlas Apparel's inventory.

At year-end Atlas holds 5,000 winter jackets at a cost of $80 each. Spring is approaching. Expected selling price has dropped to $90, but estimated selling costs (markdowns, freight to outlets) are $25/unit. Atlas's CFO argues no write-down is needed because the jackets cost less than the selling price.