Apply the Retail Method to the Following Company Information to Calculate

question 154

Essay

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period.
$$\begin{array} { | l | l | l | } \hline & \text { Cost } & \text { Retail } \\\hline \text { Beginning inventory } & \$ 20,224 & \$ 31,600 \\\hline \text { Net purchases } & 59,508 & 97,000 \\\hline \text { Sales } & & 89,000 \\\hline\end{array}$$

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Definitions:

One Buyer

A market condition known as a monopsony, where there is only one buyer for a particular product or service, giving that buyer significant control over prices.

Marginal Revenue

The extra revenue obtained from the sale of an additional unit of a product or service.

Substitutes

Goods or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Elastic

A characteristic of demand or supply where the quantity demanded or supplied responds significantly to price changes.