The retail method:
A) Is not an estimate
B) Does not require a cost ratio
C) Eliminates any need ever to take a physical inventory
D) Aids a company in not having to calculate an inventory cost for each individual item
E) None of these

Question

Quizplus · Accepted Answer

The retail method aids a company in not having to calculate an inventory cost for each individual item by using a cost-to-retail ratio to estimate the ending inventory at retail prices. However, it is still an estimation method and physical inventory may be necessary in certain situations.

The Retail Method