Compute the Cost of Ending Inventory Using the Retail Method

question 25

Multiple Choice

Compute the cost of ending inventory using the retail method when goods available for sale at cost are $15,000,retail is $25,000,and sales at retail equal $20,000.What will the cost ratio be? What will the cost of ending inventory be?

• A)Cost ratio 60%;ending inventory $5,000
• B)Cost ratio 75%;ending inventory $10,000
• C)Cost ratio 70%;ending inventory $12,000
• D)Cost ratio 60%;ending inventory $3,000

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