Use the Following Information for Questions
Trent Co -If the Ending Inventory Is to Be Valued at Approximately

question 19

Multiple Choice

Use the following information for questions
Trent Co.uses the retail inventory method.The following information is available for the current year. $\begin{array}{lcc}&\text { Cost }& \text { Retail }\\\text { Beginning inventory } & \$ 78,000 & \$ 122,000 \\\text { Purchases } & 295,000 & 415,000 \\\text { Freight-in } & 5,000 & - \\\text { Employee discounts } & - & 2,000 \\\text { Net markups } & - & 15,000 \\\text { Net Markdowns } & - & 20,000 \\\text { Sales } & - & 390,000\end{array}$
-If the ending inventory is to be valued at approximately lower of average cost or market, the calculation of the cost ratio should be based on cost and retail of

• A)$300,000 and $430,000.
• B)$300,000 and $428,000.
• C)$373,000 and $550,000.
• D)$378,000 and $552,000.

---

Definitions:

Raw Materials

The basic materials and substances that are used in the production of goods, often processed in various ways to create the final product.

Direct Labor Cost

The total expense of employing workers directly involved in manufacturing goods, including wages, benefits, and insurance.

Manufacturing Overhead

All indirect costs associated with manufacturing, including utilities, rent, and salaries for indirect labor.

Direct Labor-hour

A measure of the work done by labor in producing goods, calculated as the total hours of direct labor expended on the production of goods.