. Inventories

Inventories are valued at the lower of cost or net realizable value. Cost is determined for domestic furniture inventories using the last-in,

first

-out (LIFO) method. The costs for imported inventories and those applicable to Lane Venture are determined using the

first

-in,

first

-out (FIFO) method.

Inventories were comprised of the following:

	August 25, 2018			November 25, 2017
Wholesale finished goods	$	29,907		$	26,145
Work in process		504			388
Raw materials and supplies		15,432			11,808
Retail merchandise		28,159			26,173
Total inventories on first-in, first-out method		74,002			64,514
LIFO adjustment		(8,560	)		(8,143	)
Reserve for excess and obsolete inventory		(1,716	)		(1,895	)
	$	63,726		$	54,476

We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs

may

be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and/or style obsolescence. Typically, product is

not

shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do

not

typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is

not

associated with a specific customer order in our retail warehouses.

Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

	Wholesale Segment			Retail Segment			Total

Balance at November 25, 2017	$	1,618		$	277		$	1,895
Acquired reserve on inventory (Note 3)		50			-			50
Additions charged to expense		1,026			304			1,330
Write-offs		(1,237	)		(322	)		(1,559	)
Balance at August 25, 2018	$	1,457		$	259		$	1,716

Our estimates and assumptions have been reasonably accurate in the past. We have

not

made any significant changes to our methodology for determining inventory reserves in

2018

and do

not

anticipate that our methodology is likely to change in the future.