Bert Logistics has the following company information for August: goods available for sale at cost are $19,000, retail is $28,500, and sales at retail equal $21,500. Bert has a normal gross profit of 35%. The cost of estimated ending inventory under the retail method is: (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The cost of estimated ending inventory under the retail method is $4,667.The retail method is an inventory costing method that uses the retail value of the inventory to estimate the cost of the inventory. The retail value is the price at which the inventory is sold to customers. The cost of the inventory is then estimated by multiplying the retail value by the cost-to-retail ratio. The cost-to-retail ratio is the percentage of the retail value that represents the cost of the inventory.In this case, the retail value of the inventory is $28,500 and the cost-to-retail ratio is 35%. Therefore, the cost of the inventory is $28,500 x 35% = $9,975.The cost of estimated ending inventory is then calculated by subtracting the cost of goods sold from the cost of goods available for sale. The cost of goods sold is equal to the sales at retail multiplied by the cost-to-retail ratio. In this case, the sales at retail are $21,500 and the cost-to-retail ratio is 35%. Therefore, the cost of goods sold is $21,500 x 35% = $7,525.The cost of estimated ending inventory is then $9,975 - $7,525 = $4,667.

Bert Logistics Has the Following Company Information for August: Goods