Using the Retail Inventory Method, If the Cost to Retail

question 51

True/False

Using the retail inventory method, if the cost to retail ratio is 70% and ending inventory at retail is $145,000, then estimated ending inventory at cost is $207,143.
$145,000 * 0.70 = $101,500

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Definitions:

Low Sacrifice Ratio

A condition indicating that an economy can reduce inflation with a relatively small decrease in economic output or increase in unemployment.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Central Bank

An institution that manages a country's currency, money supply, and interest rates. Central banks also oversee the commercial banking system of their respective countries.

Sacrifice Ratio

The sacrifice ratio measures the cost of reducing inflation in terms of the percentage of GDP lost per each percentage point decrease in inflation.