The retail inventory method may be used for all of the following except:
A) Cost the raw materials inventory in a production facility.
B) Used to provide a means of converting a physical inventory, at retail, to a cost basis.
C) Adapted to approximate both lower-of-cost or market and FIFO cost.
D) Used to provide estimated inventory valuations when a physical inventory count is impracticable.

Question

Quizplus · Accepted Answer

The retail inventory method is typically used in retail businesses to estimate the cost of inventory based on the relationship between the cost and selling price of the merchandise. It is not typically used to cost raw materials in a production facility, which would require a different method of inventory costing.

The Retail Inventory Method May Be Used for All of the Following