A business uses the retail inventory method to estimate the value of the ending inventory. For the month of June, the cost of goods available for sale is $15,900 at cost and $22,100 at retail. The cost ratio is:

Question

Quizplus · Accepted Answer

The cost ratio is calculated by dividing the cost of goods available for sale by the retail price of goods available for sale. So, $15,900 / $22,100 = 0.719 or 71.9%.

A Business Uses the Retail Inventory Method to Estimate the Value