INVENTORIES

9 Months Ended

Sep. 30, 2020

The following table recaps the components of inventory for each period presented:


	September 30, 2020		December 31, 2019
Finished goods	$	265.4	$	308.7
Work in process	50.8		54.4
Raw materials and supplies	318.5		323.5
LIFO reserve	(49.4)		(49.9)
Total inventories, net	$	585.3	$	636.7

All inventories are stated at the lower of cost or net realizable value. We generally use standard costs which include materials, labor and production overhead at normal production capacity. The last-in, first-out (LIFO) method is primarily used to value our domestic steel-related inventories, largely in the Bedding Products and Furniture, Flooring & Textile Products segments. Inventories accounted for using the LIFO method typically represent approximately 40% of our inventories. Due to the sharp increase in demand that began in the latter part of the second quarter of 2020, our Bedding Products segment inventories have been much lower than historical levels, and LIFO inventories currently represent about one-third of our total inventories. For the remainder of the inventories, we principally use the first-in, first-out (FIFO) method, which is representative of our standard costs. For these inventories, the FIFO cost for the periods presented approximated expected replacement cost.

Inventories are reviewed at least quarterly for slow-moving and potentially obsolete items using actual inventory turnover and, if necessary, are written down to estimated net realizable value. Restructuring activity and decisions to narrow product offerings also impact the estimated net realizable value of inventories. We have had no material changes in inventory writedowns or slow-moving and obsolete inventory reserves in any of the years presented.

The following table contains the LIFO activity for each of the periods presented.


	Nine Months Ended September 30,				Three Months Ended September 30,
	2020		2019		2020		2019
Balance, beginning of year	$	(49.9)	$	(82.2)	$	(47.4)	$	(71.8)
LIFO (expense) benefit	—		18.0		(2.0)		7.6
Allocated to divested businesses 1	.5		—		—		—
Balance, end of period	$	(49.4)	$	(64.2)	$	(49.4)	$	(64.2)

1 During the second quarter 2020, we divested a small operation with annual external sales of approximately $10.0. No significant gain or loss was realized on the sale of this operation.