A method that uses average gross profit rate and net sales to compute inventory is:

A) the retail method.
B) the gross profit method.
C) the weighted-average method.
D) None of these answers is correct.

Gross Profit Method

An accounting technique used to estimate inventory levels and cost of goods sold by applying a consistent gross profit percentage to sales figures.

Retail Method

An inventory accounting method used in retail, estimating the ending inventory value based on the relationship between cost and retail price.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available.