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    rianyx's Avatar
    rianyx Posts: 1, Reputation: 1
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    #1

    Oct 5, 2008, 08:45 AM
    Retail Method
    KoKo Company uses the retail method of inventory costing. They started the year with an inventory that had a retail cost of $35,000. During the year they purchased an inventory with a retail cost of $300,000. After performing a physical inventory, they calculated their inventory at $60,000. The mark up is 100% of cost. Determine the ending inventory at its estimated cost.
    ashmoru's Avatar
    ashmoru Posts: 7, Reputation: 1
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    #2

    Oct 5, 2008, 01:16 PM

    are you looking for the cost price of ending inventory at retail price of 60,000. Then it is as follows:
    retail price = 60000
    markup = 100
    margin = [(markup)/(100+markup)]*100
    i.e margin = 50%
    cost price of the ending inventroy = 50% of 60000
    = 30000

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