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Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements.The following information is available for the month ended May 31:

-Refer to the information above.Estimate the cost of the May 31 inventory using the retail method.
A)$116,964
B)$137,400
C)$150,425
D)$204,000

Question

[The following information applies to the questions displayed below.]
Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements.The following information is available for the month ended May 31:
 
-Refer to the information above.Estimate the cost of the May 31 inventory using the retail method.
A)$116,964 
B)$137,400 
C)$150,425 
D)$204,000

Quizplus · Accepted Answer

The retail method estimates the ending inventory value by using the cost to retail price ratio. This is calculated by dividing the total cost of goods available for sale by the total retail price of goods available for sale. The cost of the May 31 inventory is then estimated by applying this ratio to the ending inventory at retail prices. Without the specific numbers provided in the question, the correct answer cannot be determined through calculation. However, based on the options given, if A is identified as the correct choice, it means that using the retail method and the information provided, the estimated cost of the May 31 inventory would be $116,964.

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