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Inventories
9 Months Ended
Aug. 06, 2022
Inventory Disclosure [Abstract]  
Inventories
Note 2 Inventories
New home inventory is carried at the lower of cost or net realizable value. The cost of finished home inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. In addition, an allocation of depreciation and amortization is included in cost of goods sold. Under the specific identification method, if finished home inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or net realizable value.
Other
pre-owned
homes are acquired (Repossessions Inventory) as a convenience to the Company’s joint venture partner, 21st Mortgage Corporation. This inventory has been repossessed by 21
st
Mortgage Corporation or through mortgage foreclosure. The Company acquired this inventory at the amount of the uncollected balance of the financing at the time of the foreclosure/repossessions by 21st Mortgage Corporation. The Company records this inventory at cost determined on the specific identification method. All of the refurbishment costs are paid by 21
st
Mortgage Corporation. This arrangement assists 21
st
Mortgage Corporation with liquidation of their repossessed inventory. The timing of these repurchases by the Company is unpredictable as it is based on the repossessions 21
st
Mortgage Corporation incurs in the portfolio. When the home is sold, the Company retains the cost of the home, an interest factor on the cost of the home and a sales commission, from the sales proceeds. Any additional proceeds are paid to 21
st
Mortgage. Any shortfall from the proceeds to cover these amounts is paid by 21
st
Mortgage to the Company. As the Company has no risk of loss on the sale, there is no valuation allowance necessary for this inventory.
New Inventory held at consignment locations by affiliated entities is included in the Company’s inventory on the Company’s condensed consolidated balance sheets. Consigned inventory was $915,683 and $794,766 as of August 6, 2022 and November 6, 2021, respectively.
Pre-owned
 
homes are also taken as
 
trade-ins
 
on new home sales
 
(Trade-in
 
Inventory). This inventory is recorded at estimated actual wholesale value, which is generally lower than market value, determined on the specific identification method, plus refurbishment costs incurred to date to bring the inventory to a more saleable state.

The
Trade-in
Inventory amount is reduced where necessary on a unit specific basis by a valuation reserve, which management believes results in inventory being valued at market.
Other inventory costs are determined on a
first-in,
first-out
basis. A breakdown of the elements of inventory is as follows:
 
     August 6,
2022
     November 6,
2021
 
Raw materials
   $ 2,314,299      $ 2,225,532  
Work-in-process
     132,416        97,021  
Inventory consigned to affiliated entities
     915,683        794,766  
Finished homes
     16,869,501        7,140,880  
Model home furniture
     153,723        136,089  
    
 
 
    
 
 
 
Inventories
   $ 20,385,622      $ 10,394,288  
    
 
 
    
 
 
 
Pre-owned
homes
   $ 662,453      $ 1,297,475  
Less homes expected to sell in 12 months
     (662,453      (542,081
    
 
 
    
 
 
 
Pre-owned
homes, long term
   $ —        $ 755,394