Under the retail inventory method the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by

A) net sales.
B) goods available for sale at retail.
C) goods purchased at retail.
D) ending inventory at retail.

Retail Inventory Method

An accounting method used by retailers to estimate their ending inventory balances by applying a cost-to-retail price ratio to the retail value of the inventory.

Cost-to-retail Ratio

A method used to estimate the value of ending inventory based on the ratio of the cost of goods available for sale to the retail price of those goods.

Ending Inventory

The worth of products ready for sale at the close of an accounting cycle, determined by adding the initial inventory and purchases, then subtracting the cost of goods sold.