The gross margin method is often used for estimating inventory destroyed by a disaster such as a fire.

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The gross margin method is a common way of estimating the cost of inventory lost or destroyed in a disaster such as a fire. This method involves calculating the difference between the cost of goods sold and the selling price, and then applying that percentage to the inventory cost to estimate the value of the lost inventory.

The Gross Margin Method Is Often Used for Estimating Inventory