Darla's Card Shop Uses the Average Cost Retail Inventory Method

question 19

Multiple Choice

Darla's Card Shop uses the average cost retail inventory method to determine the ending inventory. Darla's accounting records for the current year contained the following information:
In addition, sales returns for the year were $28,000, and employee discounts taken were $6,000. What is the cost of the ending inventory

• A) $35,000
• B) $50,400
• C) $54,600
• D) $58,800

---

Definitions:

Unit-level Activity

Tasks or operations that vary with the number of units produced, such as assembling or packaging.

Resource Consumption

The amount of resources used during a process, such as raw materials, energy, or labor.

Activity Rate

The cost incurred per unit of activity, used in activity-based costing to allocate overhead costs to products.

Overhead Cost

Expenses related to the operation of a business that are not directly tied to a specific product or service, such as rent, utilities, and administrative salaries.